Warning Signs of a Debt Relief Scam
November 22, 2022 (Investorideas.com Newswire) For the love of money, some people would steal from their own brothers and even rob their own mothers. This is true, even among people who already have lots of money-because some people can never get enough.
Long story short, wherever money is concerned, expect to encounter someone trying to steal it. With that in mind, lets take a look at some of the warning signs of a debt relief scam.
Guaranteed Settlement For "Pennies on the Dollar"
Any debt settlement company offering such a guarantee is operating in violation of the law. Debt settlement companies are not allowed to offer guarantees-simply because the process is fraught with uncertainties. Yes, many lenders will agree to negotiate a more favorable payoff amount if they think you're going to file for bankruptcy protection-but some won't.
Even if a debt settlement agent has dealt with the company in the past, there's no guarantee your specific offer will be accepted. Settlement offers are considered on a case-by case basis. This is one of the most important things to keep in mind when vetting debt settlement companies.
Advertisements For "Government" Debt Relief
The federal government has no programs for helping people deal with credit card debt. Yes, there are programs for student loans and back taxes, but nothing for credit card debt, or most other forms of consumer debt for that matter. Anybody claiming to represent "President Biden's credit card debt settlement plan" is not on the up and up.
Robocalls and Other Unsolicited Solicitations
Debt settlement companies are not permitted to contact consumers with offers of debt relief. They can only help people who contact them first. If you get a call from someone offering debt settlement services, this person is operation in violation of the law.
Requests Fees Up Front
Charging upfront fees is also illegal. Debt settlement companies are permitted to invoice customers only after a debt settlement agreement has been reached and payment has been made to the creditor to settle the debt.
Moreover, debt settlement companies are not allowed to disburse monies to any creditor without your prior approval. In other words, they cannot bill you until you agree to a accept settlement offer and pay it.
You can learn more about this at Freedom Debt Relief.
No Physical Address and Phone Number
Legit debt settlement firms have valid street addresses and offices you can visit. If you encounter an "online" debt settlement company with no physical address, they're flying by night and hoping to take you for a ride in the dark. Don't go for it. Before you agree to work with any company in this regard, conduct your due diligence. Check with the Better Business Bureau, the Federal Trade Commission website and your state's Office of the Attorney General.
Skirting Questions/ Limited Transparency
Debt settlement companies must disclose all possible consequences of entering a debt settlement program. Further, they must explain all of the fees you'll encounter and how long it typically takes to resolve debts in the amounts you're carrying them-based upon your income level.
They must also tell you how much you must set side in the settlement fund they will use to clear your debts. Further, they must inform you that the money in the fund can be withdrawn by you at any time-before it's paid to a creditor-regardless of the status of the settlement proceedings.
These are the most common warning signs of a debt relief scam. People conducting them are counting on you to be so anxious to resolve your debt problems that you won't pay close attention to what they're doing. However, failing to do so could land you in even more debt that you already have.
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