Millions of Americans are currently indebted on credit cards, medical bills, student loans, and various other unsecured loans or bills. These people are not able to make even minimum monthly payments on what they actually owe. Even all those people who are managing their payments would choose to pay less. Such circumstances tend to make the consumers, with debt, an easy target for debt relief and debt relief scams.
Make sure you have the right knowledge so that you can save yourself from debt relief scams that may cost you more and end up increasing your debt. Such scams often lead to identity theft. The best way is to get familiar with the common debt relief scams and the important tips on how to protect yourself from such scams.
Following are some of the common signs that confirm you can be a prey of debt relief scams –
They will promise reduced interest rates
You must have come across such claims in promotions on different websites, via emails or phone. First and foremost thing you should know is that no company or law firm can give you an assurance that they will successfully negotiate with your creditor to have a reduced interest rate. You can consider these claims and assurance as red flags.
They will charge upfront fees
If the company is asking you for some amount upfront prior to offering any kind of service then it is completely illegal practice. If the company is not disclosing what they will do and don’t share the charges for offering their services, then also these actions are considered against the law. Such fake companies and firms are only concerned with gaining your personal details and your money.
They will claim their programs are backed the government
If it is a fake company, they will advise you to have the legal right to settle your accounts and the government has passed a legislation providing you a right to settle your accounts. Some claims tend to make some people believe that their debts will be reduced, but in actuality, all these are false claims and do not have any relevance.
They will offer a fee-based program for bringing down the student loan payments
With a significant rise in the student loans, the scams associated with these loans have also surged. These counterfeit companies will charge for the programs that the student loan programs are already offering for free at www.studentaid.gov. Federal programs offering abridged monthly payments include flexible and income-based repayment plans.
They are not a member of BBB and US Chamber of Commerce
You can easily make out the authenticity of the debt relief company by visiting their official website. Such companies have to be registered with Better Business Bureau and US Chamber of Commerce. A legitimate company will also be a part of associations such as American Fair Credit Council and their official website will have BSI Certificate of Registration. This certificate suggests that they are offering services in accordance with Best Practices for Accredited AFCC Members Checklist.
How to Avoid Debt Relief Scams
If you don’t want to be a victim of debt relief scams, then make sure you have followed the following tips to avoid and protect yourself from debt relief scams–
- Make sure you had a word with the customer support executive. There are chances that these executives are also as sneaky as the details mentioned on the website, but at least you can ask them about the details repeatedly to check the authenticity.
- Make sure you keep an eye on your accounts. The moment you witness any suspicious activity, immediately cancel your card and file a report.
- If you are thinking of trusting the reviews given on their official website, then think again. Make sure you have checked the reviews on other websites as well to have authentic information. If the reviews are not in favor then you will know what to avoid.
- Make sure you have read the complete document thoroughly before you sign up. You should also be aware of any hidden fees that may surface in the later stages.
- If you want to know the legitimacy of the debt relief company, make sure you have checked its BBB ranking.
- Make sure you have used a prepaid debit card for your account. That way, the company won’t be able to charge more than what you actually authorize. Above all, they won’t have any access to your funds.
How to choose the best debt relief company
You will come across various companies promising you an average debt reduction. Without a doubt, the results are something you should consider, however, fees, general transparency, and customer support are some of the key factors that you should not overlook.
The best and professional debt relief company will be accredited by various organizations such as AFCC (American Fair Credit Council), BBB (Better Business Bureau), and IAPDA (International Association of Professional Debt Arbitrators).
All those companies which are in business for a longer duration have a reputation to uphold and fewer chances of being involved in malpractices. You can also inquire about the company from your friends and family members about the company’s standing.
- Clear and Comprehensive Website
When you are in debt, you have so many questions about the debt settlement process. The best debt relief companies will have all the information on their official websites such as fees, services, and related FAQs.
- Low Fees
You don’t worry about the fees as the best debt relief companies will keep their fees low as compared to their competition.
- A variety of debts
All debt settlement programs will settle medical bills and credit card debts. But the best companies will go ahead and settle whether you have student loan debt, business debt or any other particular secured debt.
- A reasonable timeline
Generally, the duration for settling a debt is two to four years. If you are taking the services of one of the popular debt settlement companies, then there are no specific timelines as the settlement can be done quickly as well.
- Extensive customer support
With a popular debt settlement company, it is far more convenient to get in touch with the representatives of the company via email or phone. Having chat will be an added bonus. The best companies will assign a program manager, who will function as your contact and advocate the moment you sign up. Such companies will allow you online account management as well.
- Savings to you
As far as the savings are concerned, the best companies will help you save a minimum of 30% on your debt after paying the company’s fees.