The promise of relief in a dire financial situation can be like music to your ears. However, just like the ancient Greek mythological figure Odysseus, you have to be careful to avoid letting what might be a Siren’s song lead you to ruin.
There are people in this world who unashamedly prey upon the hopes of others who are in tough situations. What’s more, the COVID-19 pandemic economic downturn has brought these criminals out in droves. With this in mind, you’ll do well to read over this list of credit card debt relief red flags to avoid.
1. Guaranteed Results
While an experienced and responsible debt relief firm can be effective in most cases, there is always the odd chance they will not be able to get cooperation from a creditor. This is why no lawful debt relief firm offers guarantees. Anyone who promises to settle your credit card debt for pennies on the dollar is lying to you. Moreover, they cannot offer any assurances as to how long it will take to clear your debts, or how much you’ll save.
2. Upfront Fees
Regardless of what they call the charges, any company asking you for money upfront to help you settle your credit card debt is operating in violation of the law. That’s right, it’s illegal for them to bill you before they’ve performed the service. Too many consumers got ripped off by illegitimate companies engaging in this practice, so the FTC made doing so against the law. The only exceptions are non-profit credit counseling programs requesting fees to sign you up for a debt management program.
3. “Special” Government Programs
While there do exist legitimate government entities charged with providing programs to help consumers with medical and utility bills, there are no such federal or state organizations for debt settlement or debt relief. What’s more, those government programs are free of charge. Anyone telling you they represent a government program and asking for money is looking to steal from you.
4. Glossed Over Consequences
Credit card debt relief programs require you to stop making payments to your creditors and instead deposit that money into an escrow account over which you have control. Legitimate credit card debt relief agents will then use those funds to pay off negotiated deals — but only with your approval.
However, this means there will be a considerable amount of time during which your credit card bills will go unpaid. This will irritate the people you owe. They’ll inform the credit reporting bureaus of their concern and your credit score will drop. Any honest debt relief firm will tell you this.
They must also provide details about the amount of money you’ll need to save before they can make a settlement, as well as outline their fee structures and the terms and conditions within which they’ll work on your behalf.
Moreover, all of this information must be supplied upfront, free of charge, and without requiring you to provide any information about yourself at all.
These are the top four credit card debt relief red flags to avoid. You know, times are hard enough out here these days without iniquitous people making life even tougher. And yet, there is a subset of humanity out there willing to work harder to steal than to build.
The best advice you can ever get on this subject is anything that sounds too good to be true generally is too good to be true. There are no easy, quick and/or painless routes out of debt. It takes time to build it up and it takes time to break it down too.
Keep this in mind when you’re seeking a solution and you’ll be alright.