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How do you recognize a debt relief scam?

On Behalf of | Apr 23, 2021 | Consumer bankruptcy |

Did you get an offer from a debt-relief company that sounds too good to be true? There is a good chance it might not be true. 

It is not easy to regain your financial freedom after unmanageable debt. That is because there are real people and real companies out there to whom you owe money. True debt relief balances your needs against your lenders’. 

Scammers solicit

As explained by the FTC, a common attribute of debt relief scams is that they use a hard sell to push a specific set of false promises. Additionally, they sometimes advertise via robocalls. 

However, not all people who have a business development plan are scammers. There are many legitimate debt relief agencies that advertise — and even some that specialize in a specific type of service, such as bankruptcy. 

Scammers charge large payments up front

The traditional credit or loan scam would try to charge you a large amount of money up front to perform some type of negotiation or service. Alternatively, the scammer would continually ask for payments for various stages of the fraudulent service. This is in contrast to legitimate services, which typically have clear, limited fee schedules. 

Scammers offer to break the rules

Another hallmark of scammers is that they often promise to do something that is illegal or impossible. An example might be offering to unilaterally change the terms of your loans. Another common example is when scammers claim to be able to remove or block true information on your credit report. 

Even if you know all of this, it can sometimes be difficult to determine what is real and what is a scam. There are various government bodies, such as the FTC and the Tennessee Division of Consumer Affairs, that could help you investigate the people offering you services or learn more about this topic.