Pass on credit card debt relief scams and do it on your own

Pass on credit card debt relief scams and do it on your own

During this wrenching, endless period of economic doldrums, debt relief and debt reduction scams have spread like wildfire. Credit card debt is a major problem as the horrible economy has put millions in financial distress. Predatory debt relief companies promising peace of mind are seeking out people drowning in debt. Even so-called legitimate debt reduction services charge hefty fees for something people can do themselves with financial discipline and effort.

Resource for this article: Don't fall for credit card debt relief scams, just do it yourself

Debt reduction pitfalls

Most companies offering debt reduction services pitch debt reduction services where you pay back existing debts with an additional loan. Offering to negotiate with your creditors for an amount less than you owe is an additional tactic. All they care about is signing you up, not whether or not their programs will actually work. An significant thing to realize is that paying less than you owe is listed on your credit report as failure to pay in full, which damages your credit score.

Debt relief scammers

That financial predators sell themselves as legitimate companies with the ability to help consumers overwhelmed by credit card debt is no secret. The Los Angeles Times reports that the Government Accountability Office sent investigators to debt management companies posing as debt-ridden consumers. Sometimes promising debt reduction of up to 50 cents on the dollar, the companies made wild exaggerations of their success rates.

Debt relief deception

After paying big up-front fees to debt management companies, often running to a number of thousand dollars, numerous consumers end up deeper in debt than they were before. MSNBC reports on the ordeal of a woman in North Carolina who fell for the pitch from a debt relief business that she would conserve enough with lower interest rates to pay back credit cards, a mortgage and a car loan five times faster. She was assured that for $ 499 she would save $ 2,500, and savings from lower interest rates within the first 30 days would a lot more than cover the fee. The Federal Trade Commission sued the firm after they refused to refund the $ 499 fee after failing to deliver on those promises.

The latest debt relief trick

Debt relief criminals today often try to exploit the “government approved” angle. The Los Angeles Times article reports that advertisements by debt management companies, also as statements by company representatives to GAO investigators, provided evidence the firms lead clients to believe their services are part of a government program similar to the recent bailout of troubled banks. One of these companies with a prominent Internet presence is called The “Federal Debt Relief Program”. Another is called "U.S. National Debt Relief Plan".

Debt relief independence

There is no government-backed debt relief program among the hundreds of companies online falsely claiming they are. Debt relief has become a huge industry intended to kick individuals when they're down. The best route to debt relief is still getting on a budget, paying your bills on time and saving money to spend on debt reduction. If you're struggling to make payments, contact your lenders to see if you are able to negotiate better terms, lower payments or refinance a car loan or home loan.

 Debt relief advice you are able to trust

The National Foundation for Credit Counseling is a good place to start if you need help with debt problems. The NFCC is a nonprofit community organization that provides free and confidential debt management advice to everyone that needs it. The NFCC offers consulting in person or by phone. Look into nfcc.org to discover a counselor as part of your area.

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Los Angeles Times

latimes.com

MSNBC

msnbc.msn.com

NFCC

nfcc.org