If you’re struggling to pay off debts such as credit card debt, car loans, or student loans, you may be looking for ways to reduce your debt. If so, you are not alone. Total household debt in the United States was $15.84 trillion in 2022. Still, it’s important to be careful when you receive tempting offers of debt relief from lawyers.
Debt relief and credit scammers target people with high debt or low credit scores. Signing up for a debt relief service without doing your research can lead to more lost money and an even worse credit score if you’re not careful.
When looking for help managing your debt, talk to a qualified credit counselor. Know the signs of a credit scam and research a debt relief company before you start working with them.
What Debt Relief and Credit Scams Look Like
Debt management can seem overwhelming, and you’re probably looking for a way to reduce your debt. But, it’s important to be aware of common debt relief and credit scams so you can spot them when they come your way.
You could be a victim of a credit scam if they contact you first. Scammers can email or text you or call you. They take advantage of your desire for a practical debt solution in order to get your attention. The Federal Trade Commission (FTC) enforces the Telemarketing Sales Rule which requires telemarketers to follow certain rules. If you believe they are not complying with these legal regulations, contact the FTC.
Debt relief and credit scams also usually require an upfront payment. A legitimate debt relief company will only collect your payment once they are able to help you. When a company asks you for a large upfront payment, proceed with caution. There is no guarantee that debt can be reduced, so you should avoid any company that guarantees credit improvement or debt settlement.
How to protect yourself from scams
What can you do to stay safe from credit and debt relief scams? Follow these tips:
- Know the law. The FTC regulates the things telemarketers can and cannot do. If you know the regulations, you can recognize when something is wrong. Familiarize yourself with the telemarketing sales rule, which allows calls only at certain times and requires lawyers to stop calling you if you ask.
- Do your homework. If you need help with your credit or managing your debts, look for reputable credit counselors and companies. Check the Better Business Bureau (BBB) to determine if a company is a scam or the real thing.
- Consider all options. Managing a large amount of debt is tricky, but there are several ways to improve your situation. Examine all your options. Consider talking to a credit counselor, consolidating your debts, or working with a legitimate debt settlement company.
- Avoid upfront costs. A good debt settlement company will not charge you upfront. They will only charge you if they end up helping you with your debt. Do not sign up for any service that requires an upfront fee.
Legit debt relief companies
There are many debt relief companies out there, but not all of them are good. Here are some options for the best debt relief companies.
Accredited Debt Relief
Unlike credit and debt relief scammers, Accredited Debt Relief is committed to honesty and integrity. Once you’ve used their free consulting services, the Accredited Debt Relief team will tell you the best plan options for your situation and help you save up to 50% on your monthly payments.
Claiming to have advised over 300,000 people since 2000, CuraDebt works with all kinds of debt to help with debt negotiation, debt settlement and tax debt relief. They also have licensed attorneys on their team who can be consulted on your case as needed at no additional cost to you.
Debt Relief Freedom
Freedom Debt Relief works hard to help its clients free themselves from credit card debt. They strive to provide you with the maximum savings possible and they inform you each time one of your debts has been settled.
National debt relief
National Debt Relief is one of the nation’s leading debt relief agencies. The company has an A+ rating from BBB, so you can rest easy knowing you’re in good hands. Customers have access to a free consultation before signing up for a debt settlement plan with the company.
New era debt solutions
Unlike debt relief scammers, New Era Debt Solutions has no upfront fees. They promise to help customers get out of debt faster while paying just one low monthly fee. They also have an A+ rating from BBB and 4.9 out of 5 stars on Google.
At the end of the line
Dealing with a lot of debt and bad credit takes a lot of work, but you don’t want to fall for a scam just because you’re desperate. If someone reaches out to you with an offer that sounds too good to be true, it probably is. To find a reputable debt settlement company, search for it through the BBB and the FTC.