Beware Of Debt Reduction Scams

AARP Fraud Watch Network Compiles Tips to Identify Debt Scams

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Jun 24, 2015, 12:50 ET

CHICAGO, June 24, 2015 /PRNewswire-USNewswire/ -- Getting out of debt in a timely manner is an issue millions of Americans are being forced to address. Consumer debt is rising, and so is the number of companies claiming they can lower your interest rate or reduce the monetary amount you owe. Except some of these debt relief programs are run by con artists unable to deliver on their promises. Falling for these scams can result in the loss of thousands of dollars in false fees, leaving you in worse financial shape than when you first reached out for help.

"It's bad enough that you have to invest great amounts of time and money to pay off the debt you've acquired over time," said AARP Illinois Communications Manager Gerardo Cardenas. "The last thing you want to hear is that you have fallen prey to con artists who do not deliver on their promises and leave you in an even deeper financial hole."

AARP Fraud Watch Network has compiled a list of things to be aware of when looking into companies claiming to help lower debt:

Makes promises or guarantees to settle all your credit card debts for pennies on the dollar.
Advertises a "new government program" to bail out personal credit card debt.
Advises you to stop communication with your creditors, but doesn't explain the serious consequences.
Tells you it can stop all debt collection calls and lawsuits.
Charges high upfront fees before any debts are settled.
Claims lowering debt is a fast, easy, and painless process.

If confronted with a company you believe could be fake there are a number of things you should do to ensure you won't be scammed out of money needed to be directed towards your piling debt:

Ask questions, lots of them.
Demand that the company disclose any set-up or maintenance fees in writing and be sure to review the agreement you have with them closely to guarantee it outlines the timeframe for payoff.
Compare a couple of services and get a feel for how the company operates. The credit counselor should spend at least 20 to 30 minutes with you to get an idea of your personal finances.
Don't rely on claims of non-profit status, or on the company's website. Conduct your own searches of the company at the Better Business Bureau and state consumer protection agencies.

In 2014, AARP launched the Fraud Watch Network to arm Americans with the tools and resources they need to spot and avoid scams and identity theft. But scammers are still out there, making every attempt possible to cheat consumers out of their hard-earned money. The public can sign up for free to receive Fraud Watch Network alerts and more at www.aarp.org/fraudwatchnetwork.

SOURCE AARP Illinois