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Debt Relief Scam Signs - FTC Consumer Update

Debt Relief Scam Signs – FTC Consumer Update

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The FTC, in a June 16, 2017 post by Rosario Méndez, Attorney, Division of Consumer and Business Education, FTC, provided information for consumers about the “signs of a debt relief scam.”

According to the FTC’s post:

. . . a call from someone who says they can reduce or eliminate your debts might sound like the answer to your problems. But in many cases, unscrupulous people are behind these calls. They don’t have any intention of helping you, but are very interested in taking your money. How can you tell if you’re dealing with a debt relief scammer? Because they ask you to pay them before they do anything for you.

That’s what the FTC and the Florida Attorney General said happened in a massive debt relief scam they were able to stop last month. The defendants told people they would pay, settle, or get rid of their debts. But they didn’t. Instead, they just took people’s money. Over time, people found out that their debts were not paid, their accounts were in default, and their credit scores were severely damaged. Some people even got sued by their creditors, or were forced into bankruptcy.

According to the posting, . . . scammers try to take advantage of those dealing with debt – but there’s legitimate help . . .. [Individuals] can talk to [their] creditors directly to negotiate a modified payment plan. [Individuals] also can look for credit counseling.

The FTC posting also recommends that [t]o find reputable help, start with a credit union, local college, military base, or the U.S. Cooperative Extension Service.

Importantly, the FTC posting states that if a person decides to work with a debt relief service to remember the following:

  • A legitimate debt relief company won’t make you pay up front. That’s illegal.
  • No one can guarantee that your creditors will forgive your debts.

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