Debt scams are more common than you might think; in fact they are more prevalent than most people would even care to think about because it means that they could be at risk. Debt scams exist because so many of us are in debt and we dream of being rid of the debt, of resolving it once and for all, and not having the burden of owed funds on our shoulders. In fact, most of us are so excited to be out of debt that we often don’t check out things as thoroughly as we should.
Common Debt Fraud
One of the most common debt scams today occurs over the phone. Someone will call up an individual and let them know that they have an outstanding debt and that they have just 24 hours to pay for it or they will have a warrant placed for their arrest. This is enough to make most people stand up and take notice and many people will pay the debt. What they don’t know is that they are often paying the money to anyone other than a debt collector, this is often a scam and many people never follow up on the debt and don’t even know that their information has been stolen. A lot of these scammers don’t just take the one payment; they will use the credit card or bank account until they cannot use it anymore!
Other debt scams have involved supposed debt relief companies telling people that they could help them get out of debt. The way that this scam usually works is that the “company” will say that they will negotiate all of the fees with the credit card companies and that the consumer just needs to pay them a sum each month and the company will distribute the funds directly to those that you have debts with. To most people this sounds great because they are told the phone calls will stop and their money can be used more efficiently than they would be able use it because of the negotiations. Unfortunately, the scammers will pocket the money as long as it keeps coming in and when the consumer calls to complain they will not get any answers. Many people have lost hundreds, if not thousands of dollars to these sorts of debt scams.
Another of the common debt scams is supposed credit elimination experts calling consumers and telling them that the credit card or credit line that they have is illegal. This will alarm the consumer and they then fall into the trap where the “company” tells them that they will take the money that they normally pay to the credit card to take the credit card company to court. Why would you pay someone? Because you are desperate to get out of debt and they will tell you that they can get the judge to waive the debts that you owe the credit card or line of credit. Most people think that paying a few hundred or even a thousand dollars is better than paying off their whole debt. Unfortunately, the “company” just takes the money and runs!
Avoiding Debt Fraud
You can help to avoid debt scams by asking many questions. Usually when you continue to ask questions you will find that a scammer will stumble. This is not always the case so don’t use this tip alone. Next, ask for them to send you information through the mail. Many online and telephone scammers don’t have any actual printed document and this will eliminate them as a possible debt alliance for you. Also be sure that you ask them for their licensing numbers or any credentials. Tell them that you are going to check with the local better business bureau and that you want to know more about the company. When you look into a company you should be able to find, independent of their website, information about the company, where they are licensed, etc. If you cannot find this information you need to steer clear of them at all costs.
In addition to all of this, you need to think rationally and leave all emotion out of it. This can be hard, especially when you are in debt, but you need to take at least 24 to 48 hours to consider any option and to look into the company before accepting. You need to look at facts without considering hopes. This will often help you to follow your intuition and steer you in the right direction.