How to Identify Debt Relief Scams

You can see the ads all over the internet, and late at night when you’re thinking about your debt and how to get out from under, these ads can start to look like a way out from under. The problem is that the vast majority of these ads are debt relief scams. One former California lawyer was ordered by the FTC to pay more than $18 million in fines and was barred from debt relief practice for inducing homeowners to sign on to mass joinder lawsuits alleging fraud by mortgage lenders. Instead he and others stole millions of dollars from desperate clients who only wanted to save their home. That he was disbarred in California does not prevent him from moving to another state and starting the same scam over again.

Locally, Florida Attorney General Pam Bondi and the FTC recently obtained consent judgments against several persons and entities who misled consumers into purchasing debt relief services. The parties then failed to provide the advertised services and collected more than $12 million. They must pay $4 million in fines to Florida and the FTC, and our banned from engaging in debt relief services. In the space of time that these scam services are able to operate, they can collect millions of dollars, and wreck hundreds of lives. You should know the signs of a debt relief scam in order to protect yourself, and here are some of the most common.

1. The company or practice charges fees before settling your debts.
2. You are promised that you will have a completely new credit identity.
3. You are told that by using their services all of your unsecured debts will be erased or settled at a considerable discount.
4. You are promised that collections actions, lawsuits, and debt collection activity will be stopped without filing for bankruptcy.
5. The company will not send you information without you providing a credit card number or a bank account number.
6. Claims are made that the company is a new government program to bail out your specific type of debt. They may invoke the name of the current president or Congress.
7. You are pressured to stop communicating with creditors, and allow all communications to go through the company.
8. The company tries to enroll you immediately in either a debt relief program or a debt management program without providing any counseling, or thoroughly reviewing your financial situation.
9. Wants you to make payments into an escrow account before your creditors have accepted any offer of settlement.

If your debt is keeping you awake at night, and if you are so desperate that some of these ads are starting to sound reasonable, you need to call either our West Palm Beach or Fort Lauderdale office and set up a consultation. Your first consultation is free, and we can give you our best advice. Whether it’s bankruptcy, loan consolidation, or some other solution we are here to help you seven days a week.