Debt Relief Scams Make Promises but Fail to Deliver |
By Ashley Russell on November 10, 2011
.jpg.aspx?width=75&height=75) Those thousands of people in debt in this country are experiencing extremely difficult and desperate times. For someone deep in debt, the chance of becoming debt free sounds worth taking it. This creates a great atmosphere for scam artists to take advantage of this desperation. These debt relief scams fool thousands of people every year, and are an up and coming focus of the government as a problem that they need to take care of.
There are many very capable and trustworthy companies out there when it comes to debt relief; however, there are also many con artists who will not be able to help individuals out of debt but will take their money and run. Many companies promise to lower individuals’ interest rates or monthly payments for their personal information and a "small" nominal fee. This fee is often several hundred dollars. Individuals fall for paying this not so "nominal" fee because they are promised savings much beyond a few hundred dollars. Companies promise that their through their program the consumer will be able to save thousands on lower interest rates, reduced fees, and lower payments, making the payoff of a few hundred dollars well worth it. Those who work for these "companies" are persuasive and persistent, insisting that the savings will be well worth the fee. Often this promise of a better future ends up with someone already strapped for money losing even more in a worthless scam.
This problem is becoming more persistent around the country. In the recent past, the Federal Trade Commissions (FTC) has sued dozens of debt relief companies for creating a similar scam. Often companies are able to downplay the fees involved, either not mentioning them or saying they are small or even non-existent, when in fact they are hundreds of dollars. They sometimes even tell consumers that they need to begin making payments that will go towards their bills, when in reality this check goes straight to the company.
In reality, it is difficult for individuals to discern which companies are able and willing to actually help consumers with their debt problems. The answer to this problem is that individuals need to do their homework and take their time deciding which company is right for them. Debt is a very serious problem, and the solution should not come from a 30 second ad on television or radio. Individuals should be sure to shop around, the Consumer Federation of America says that individuals shouldn't pay more than $50 in set up fees and $25 in maintenance fees every month. Agencies should be able to have specific answers to questions that individuals have. Individuals should always check with the Better Business Bureau before paying any money to any company.
Overall individuals need to be smart and do their homework before they decide on which company to use. Otherwise, they could wind up being another statistic of those scammed by false debt relief programs. |
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