Scam Watch: Debt Relief Fraud
From Birch Gold Group
Just wanted to give you a heads up about a recent study by the Better Business Bureau (BBB) on scammers promising debt relief. It’s pretty alarming how these scammers charge thousands of dollars and fail to deliver on their promises.
If you’re a student loan borrower seeking credit and debt relief, you’re especially vulnerable to these scams. But here’s the good news – you don’t have to shell out your hard-earned money on expensive services. There are steps you can take to deal with your debt and credit issues without breaking the bank.
Summer brought some not-so-great news as American credit card debt crossed the $1 trillion mark for the first time ever. And now, with student loan payments coming due again, that adds a whopping $1.77 trillion in debt to the pile.
We know it’s tough out there, with rising prices and households struggling to make ends meet. Unfortunately, scammers see this as an opportunity to prey on those in economic distress and desperation.
The BBB has issued a warning about “debt relief” and “credit repair” scams, and they’ve received over 11,000 complaints and almost 900 negative reviews of debt and credit assistance companies. It’s important to know how these scams work so you can protect yourself:
- Companies offer to negotiate on your behalf to reduce your total debt.
- They claim they can help you reduce your debt load and establish a more manageable repayment plan.
- They might go by different names like “debt relief” or “debt forgiveness,” but it’s still the same scam. The scammer becomes a middleman between you and your creditors, charging upfront or monthly fees. And watch out for potential identity theft too.
Avoiding consumer debt scams
But don’t worry, there are ways to avoid falling victim to these scams. The BBB suggests the following:
- Know your rights when it comes to debt collection.
- Don’t pay or provide payment information until you’ve received the service.
- If you’re in default, reach out to your debt holders yourself and try negotiating a lower payment.
- Be cautious of anyone claiming to be associated with a government agency.
- And be especially careful with student loan forgiveness scams. Scrutinize any offers thoroughly before sending any money.
DIY debt repayment program
If you find yourself in need of debt consolidation or relief, the safest approach is to create your own plan. Here are some crucial steps:
- Start with budgeting – know where your money is going and stop adding to your debt.
- Give your creditors a call – don’t surprise them. They’re more likely to work with you if you’re upfront and honest about your situation.
- Prioritize your payments – take care of your mortgage first, then look into your car payment, and finally focus on unsecured debt like credit cards and student loans.
Remember, don’t let desperation push you into the arms of scammers. With a little effort, you can set yourself on a sustainable path to paying off your debts and building real wealth.
And just so you know, knowing what to look out for is key to defending against most scams. To help you detect and avoid financial scams, Birch Gold Group has pulled together an extensive resource guide that is now available on our website. The Birch Gold Group Scam Protection Resource Guide helps you identify warning signs and provides you with tips on how to avoid fraud.
So make sure to check it out!
Take care and stay safe.2023, Featured, scam watch, us debt