Fact Checked

How do I Recognize Debt Relief Scams?

G. Wiesen
G. Wiesen

Recognizing debt relief scams can be difficult, especially if you are already dealing with severe debt that may make a solution seem especially attractive. There are a number of potential red flags you should watch for, however, that can help indicate that the company may be a scam. In general, if your instincts are telling you that the offer seems too good to be true, then it usually is a scam. You can also identify many debt relief scams by learning what types of scams are commonly used and by doing research on any company before you pay it or agree to work with it.

Debt relief scams are business operations that typically make promises to help a person with his or her debt but ultimately do not provide any actual or useful service while still taking financial compensation from the person. This can be done in a number of ways, and usually involves promises about major debt reduction or large savings in the first few weeks. Any time you see an offer, or receive an offer through email or telephone, that seems too good to be true, you should be careful. Debt relief scams often prey on the fact that many people in debt are looking for any possible solution to their financial problems and provide a solution that seems almost miraculous.

Man with hands on his hips
Man with hands on his hips

One of the best forms of protection from debt relief scams is to do some research and learn how such scams operate. This allows you to more easily recognize and avoid those offers that clearly appear to be scams. You might also encounter the names of particular companies under investigation for scams, and this can help you avoid those companies in the future. In general, you should be wary of any offer that indicates a major reduction in your overall debt or severe reductions in your payments. These are often used in debt relief scams, especially if the offer requests payment from you upfront.

Offers that request your private information upfront, such as account numbers or a federal identification number, may also be debt relief scams. You should expect to provide a legitimate business with your name, the amounts you owe, and the businesses you own money to — without providing private financial information. If a company does seem to be legitimate, then you should do some research about the company before you make an agreement or any type of payment. Look up the company on the Internet, read what others are saying about it, and check the company with professional debt associations and business watchdog groups.

You might also Like

Discuss this Article

Post your comments
Forgot password?
    • Man with hands on his hips
      Man with hands on his hips