Recognizing Debt Relief and Credit Repair Scams

When you’re desperate to get out from under a boatload of debt, promises to set you back on solid financial ground sound like a miracle. 

The reality, though, is that the debt relief industry has more than its share of bad actors who seek to separate you from your cash – money you can ill afford to lose – without doing much, if anything, to help you. 

In fact, these unscrupulous companies seek to take advantage of your debt-fueled distress and vulnerability. 

Thankfully, there are ways to recognize debt relief and credit repair scams. Read on.

Explain Debt Relief

This is a financial strategy in which you enlist a reputable company such as Freedom Debt Relief to negotiate with each of your creditors in hopes of letting you pay less than what you owe to have your obligations marked as “settled.” Creditors usually go along since if you file bankruptcy – your other option when debts are overwhelming – they may get nothing.

Note that it took you some time to get into the shape you’re in. Therefore, there are no “quick fixes.” The debt relief process will take between two and four years, which is still substantially less than the time it would take for you to clear your debts on your own. That could take decades. 

Also note that if your debts are legitimate, they can’t be removed from your credit reports. In most cases, you’ll have to wait seven years before they drop off on their own.

Debt Relief and Scams

Wherever money and emotions are involved, scams tend to abound. Having said that, debt relief is a highly effective solution. It’s just that when you’re up to your hips in debt, you’re more susceptible to being taken in by anyone who “guarantees” to save you.

Some of these criminals will take your money and ghost, while others will string you along while fleecing you, deepening the hole you’re in.

How Do I Know That I’m Dealing with a Scam?

Turn away from companies that:

• Won’t provide program details. At least not until you give them information such as your credit card account numbers.
• Ask for payment upfront. That is illegal under federal law, by the way. Debt relief companies may not seek payments before they have settled consumers’ debts. 
• Are not transparent. Before asking you to enroll, a debt relief company must tell you what to expect, including approximately how long it may take your debts to be settled, and how much its services will cost. The company also must explain what risks are involved and educate you about the account you will need to set up to have money to pay your settlements. 
• Mislead you. According to the Federal Trade Commission, a debt relief company may not make untrue or unsubstantiated claims about its services.
• Make guarantees. Sure, debt relief is typically a successful strategy that offers an opportunity to start life anew. However, by their very nature, negotiations are unpredictable. There are no guarantees.
• Are not accredited. Don’t indulge any company that’s not accredited by the International Association of Professional Debt Arbitrators and the American Fair Credit Council. To better understand Freedom Debt Relief as a company, look at what the leading company says about scams.

What Other Steps Can I Take?

You certainly must do some homework to recognize debt relief scams. Check with your area consumer protection agency and your state’s attorney general for any complaints against the company in which you’re interested. You should also go online for consumer testimonials, which shouldn’t be hard to find.

You also should educate yourself about disclosure requirements for debt relief companies. The fact is that such companies must set forth their fee structure and provide you with some idea of how long it will take to resolve each debt.

Further, turn away from any agency that breathlessly touts a “new government program” that can erase your debt and repair your credit. If any new such program existed, you likely would’ve heard about it.

Ultimately, while debt relief and credit repair scams abound, there are ways to recognize them. When seeking such services, it’s imperative that you take a step back and do your due diligence, keeping in mind that if things sound too good to be true, they likely are.

If you’re looking for a debt settlement company that is accredited, credible, and experienced, we do recommend Freedom Debt Relief.