Current Debt Scams and How to Avoid Them

Debt Scam

With personal debt on the rise, many individuals are seeking debt settlement companies. These companies promise to payoff, consolidate, and end your debt problems for a small fee. Unfortunately, many of these debt companies are offering debt scams. These predators prey on the fear, stress, and gullibility of their targets. Depending on where you live, you might find older generations are being targeted by these debt scams. However, everyone is a potential target. Anyone who seeks debt management help can be a victim of debt scams. We will talk about current debt scams and help you avoid them.

The main debt scam in relation to cash advances and other debts you might have is the pay upfront agreement. A company will ask you to pay them a fee plus the money you want to go towards  your debts. For example, you might pay the company $2000 because this is what you have to negotiate with. The company then tells you they will be able to talk to all of your creditors using this $2000 and get all debts forgiven. They then ask for at least 10 percent of this amount as their fee. It could be more. Most people are paying $300 a month to pay their bills, and finding the company is pocketing this money. It takes months for you to find out that your bills are not being paid. In fact your creditors are marking you down as delinquent.

To avoid this debt scam you need to stay away from any company that is asking you to send them money up front. If they want everything you have saved they are definitely a scam. Instead, a legitimate company will first see what they can do, but more on that in a bit, as we look at the second current scam. These current scams are found via email, phone, and online. A company will give you a “store front” appearance and ask for your personal information. They will then tell you that your debts are forgiven all the while stealing your identity.

To avoid any scams, research is your best weapon. Never give out your personal information on the phone, email, or online form. Before you give your information to a company, research their history through the BBB (Better Business Bureau). Any company that has complaints against it should be avoided. If you cannot find out when a company started do not use them. Also, if you get a phone call or email,  ask them for a number to call them back. After a bit of research, try the phone number they gave you. If you found a different one for the same company online try that number. By testing the waters you are able to discern if you have been targeted by a scammer. Above all,  you need to use common sense. No one can make you do something that doesn’t feel right or that you suspect is a scam. If you have any questions or worries say no,  and terminate your contact with the company.