It’s easy to become overwhelmed by debt. The pressure one feels from mounting credit card debt, compounded by frequent collection calls, can make people want to do just about anything to get out of it.
Unfortunately, that can also make those who are experiencing such circumstances more susceptible to scams and fraudulent practices. Instead of helping people find a solution to their debt troubles, these debt relief scams usually, result in their victims being in a far worse financial situation than they had been before.
So how can you tell if a debt relief service is a scam or if it’s legitimate? Here are a few tips that will help you recognize what may be fraudulent companies.
Claims That Appear Too Good To Be True
If a company is promising huge reductions in the amount you owe or are making absolute guarantees, this should raise a red flag. If they’re trying to lure you in with extraordinary promises, like being able to eliminate your debt within a matter of months and reduce the amount you owe by an extraordinary amount, you should ask yourself how they would be able to achieve such a feat.
Practices That Seem Unethical or Illegal
If the recommendations made by the company strike you as being dishonest, trust your instincts. You don’t want to get caught up in any fraudulent or illegal actions.
Some of these fraudulent tactics include suggesting that their clients acquire a new Social Security number, or disputing several negative records on their credit reports even if they are legitimate. Not only are attempts like these fraudulent and illegal, they simply don’t work.
Do You Have To Pay A Large Amount Upfront?
Watch out for companies that tell you they will need a significant lump sum at the very beginning. A renegotiation of your debt should result in monthly payments, making large upfront payments unnecessary.
Cutting You Off From Your Creditors
Another reason for concern is if the debt relief company strongly suggests that you don’t contact your creditors. The truth is that consumers can enter into negotiations with their creditors on their own. However, a lot of people find the process to be embarrassing or simply too overwhelming. If a company doesn’t want you to speak with your creditors, you should be asking yourself why that would be.
Do Your Due Diligence
The best way to protect yourself against debt relief scams and fraud is to educate yourself as much as possible. If the company has presented you with the proposal, read the agreement very carefully, ask questions, and if you’re not satisfied with the answers, don’t sign.
Also, be sure to do your research. Make sure the company is reputable and is an accredited member of an industry association with high standards of practice.
You can also find more valuable information and informative tips on the Federal Trade Commission’s website at FTC.gov.
With these tips and resources, you’ll be able to find the right reputable debt relief company that will help you break free from debt once and for all.