Credello: Though it's the season of ghosts and ghouls, there are other things that go bump in the night all year: scammers. Many scams target those in a desperate situation, willing to take a deal that seems too good to be true in the hope it can help them get out of debt. Unfortunately, these scams typically end up leaving people worse off.
If you're concerned you might be the target of a debt relief scam, you must first understand how true debt relief works and the most popular tricks scammers use to get your money.
What is debt relief?
Before you can learn the signs to look out for, you need to have a good grasp of what is debt relief and how it usually works.
Debt relief is a term used to describe various options available to people in a difficult financial situation. These options can include the following:
- Debt consolidation: This option helps you combine multiple smaller debts into one large, more manageable loan.
- Professional help: Many qualified organizations, such as credit counselors, can help you get your finances in order and reduce your debt.
- Bankruptcy: The last resort option as it has long-lasting consequences to your credit score and can impact your ability to borrow money in the near future.
How do debt relief scams work?
Debt relief scams typically work like this:
The scammers contact you, claiming to be from a credit counseling or debt relief organization. They tell you that you qualify for a program that can eliminate your debt in a matter of weeks or months. They offer to send you information about the program and how to apply.
Once you've applied, the scammers may start asking for money. This money is often used to pay for the program fees or to cover other costs associated with the scam, like travel expenses.
If you don't pay, the scammers may threaten legal action or even take your money directly.
The most popular debt relief scams
The first step is to be aware of the signs of a scam. Here are a few to watch for:
1. Unsolicited offers: If you receive an unsolicited offer from a debt relief organization, be suspicious. These offers tend to come in the form of letters, emails, or phone calls.
2. High-pressure tactics: If the person trying to help you is very pushy and doesn't let you stop and think about what you're doing, it's probably a scam.
3. Time-sensitive deadlines: Don't agree to anything that says you have only a few weeks or months to take action on the offer. This is often how scammers try to coerce people into giving them money.
4. Unrealistic results: if the scammers promise you'll be debt-free in just a few weeks or months, be skeptical. Debt relief usually takes longer than that, and there are many steps along the way.
5. Requiring money down: if you're told you need to pay anything upfront before starting the program, run the other way! This is a common tactic used by scammers to get your money before you have a chance to question their legitimacy.
5. Excessive charges: Many credit counseling services are not-for-profit organizations and don't charge high fees like some debt relief scams do. Be sure to ask about any charges before making a decision.
What to do if you've been scammed
If you think you may have been scammed, the best thing to do is to contact your bank or credit card company. They will be able to help you get your money back and stop the scam from continuing.
The bottom line
Knowing what to look for in a debt relief scam can help you stay safe and get the help you need to start living debt-free.
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Original Source: Scary Debt Relief Scams to Look Out For