In fact, most of us are so excited at the thought of being out of debt that we often don t check out things as thoroughly as we should.

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Blake Fowler
8 years ago
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1 Debt Scams

2 Debt scams are more common than most people might think; in fact they are more prevalent than most people would even care to think. Not being aware of this can make a person more at risk of being scammed. Debt scams exist because so many of us are in debt and we dream of being rid of the debt; resolving it once and for all, and not having the burden of owing money. In fact, most of us are so excited at the thought of being out of debt that we often don t check out things as thoroughly as we should.

Debt scams exist because so many of us are in debt and we dream of being rid of the debt; resolving it once and for all, and

3 Every year, an estimated three million people fall victim to debt scammers. Many of the 'too-good-tobe-true' offers are run by con artists. If you fall for their pitch, you could lose hundreds of pounds in fees and find yourself in worse financial shape. You ll owe just as much as when you started, plus you will owe additional late fees and other penalties to the original creditor.

If you fall for their pitch, you could lose hundreds of pounds in fees and find yourself in

4 HOW TO SPOT A DEBT ADVICE SCAM Many companies offers to help you solve all your debt problems quickly for a low fee. SOUNDS LIKE A GOOD OFFER, RIGHT? WRONG. Unfortunately, if an offer seems too good to be true it usually is. Some of these scam businesses are very good at disguising their identity and may operate under different names making it that much harder to learn about their reputation.

Unfortunately, if an offer seems too good to be true it usually is.

5 Some companies will even claim they can negotiate a one-time settlement with all of your creditors and will reduce your debt by as much as 50 to 70 percent. Their goal is to get you to sign up, not to successfully rid you of the debt. So people who are scammed by these companies are left with little hope of getting out of debt.

6 BE WARY IF: THE DEBT ADVICE FIRM PROMISES TO REMOVE ALL OF YOUR DEBT. Debt does not disappear unless you pay it off. Some companies that promise to get rid of your debt maybe trying to rip you off. IT ENCOURAGES YOU TO TAKE OUT A NEW LOAN WITHOUT REVIEWING YOUR FINANCIAL SITUATION. Though many companies offer legitimate debt consolidation plans, a company that does not fully review your financial situation but tells you immediately to take out a loan is most likely trying to scam you. It is also likely that they will add loan fees and interest on top of your current debts. YOU ARE TOLD TO STOP MAKING PAYMENTS OR CONTACT YOUR LENDERS. Often, lenders are willing to work out a repayment plan with you. If the company tells you not to contact lenders, it might be withholding valuable information. ASKED TO SIGN A BLANK FORMS OR SIGN OVER YOUR PROPERTY'S OWNERSHIP.

Though many companies offer legitimate debt consolidation plans, a company that does not fully review your financial situation but tells you immediately to take out a loan is most likely trying to

7 PRICES FOR SERVICES ARE MUCH LOWER THAN OTHER COMPANIES. If the company is offering services at rates that are just too good to be true, it s probably a scam. These companies or individuals may offer some of the lowest rates in town exceptionally lower than the average. REQUEST AN UPFRONT PAYMENT. It s illegal for debt settlement companies to request an upfront payment for services. If the company is asking for money before they even start working for you, consider it a red flag. USE HIGH-PRESSURE SALES TACTICS. Debt relief companies are supposed to be working with you to create a sensible debt management plan. If they seem very pushy and more like a sales team, they could be part of a scam. Don t second-guess yourself. Trust your instincts and just walk away. HAVE FAKE CREDENTIALS Most debt relief companies maintain a list of associations and organisations they are affiliated with. Don t be seduced by fancy-sounding names or logos on the company website.

It s illegal for debt settlement companies to request an upfront payment for services. If the company is asking for money before they even start working for you, consider it a red flag.

8 Brokers who introduce clients to debt management companies with the promise to buy and sell on their debt are not only misleading the consumers but also operating outside the law. This is because a debt advice firm cannot buy a client s debt without the consent of the lender. Be aware that if you agree to pay your debt through a rogue business, you will still be liable for your original repayment obligations. This includes, the amounts paid for the false services.

This is because a debt advice firm cannot buy a client s debt without the consent of the lender.

9 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 be arrested. This is enough to make most people stand up and take notice and many people will pay the debt.

outstanding debt and that they have just 24 hours to pay for it or they will be

10 What the victims don t know is that they are often paying the money to anyone other than a debt collector, and because many people never follow up on the debt they don t realise that the debt is not being paid and that the scammer just wanted to steal their information. 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!

not being paid and that the scammer just wanted to steal their information.

11 HOW TO PROTECT YOURSELF FROM BEING A VICTIM OF A DEBT ADVICE SCAM Facing mounting bills can be frightening, but getting help with your debts is not a decision that should be based on hearing a radio commercial or getting a sales call. Texts and adverts are usually deceptive scams to gain your security information and bank details. Check accreditation status and previous customer feedback, but be aware that Some debt advice scam operators run websites which contain fraudulent customer feedback.

Texts and adverts are usually deceptive scams to gain your security information and bank details.

12 The technological advances of today have made it very easy for ANYONE to create and maintain a website that looks legitimate. On the internet, anyone can claim to be accredited and nationally recognised. Never enter personal information on a website that you are unsure about. It is better to be cautious than to give fraudulent organisations all the information they need to further your financial troubles.

On the internet, anyone can claim to be accredited and nationally recognised.

13 Contact : run by Consumer Focus, allows you to register for mail preference service and telephone preference service all at once, and offers tips on reducing unwanted mail. or by phoning This is free. Reduce unsolicited phone calls by registering your phone with the Telephone Preference Service. Reduce unwanted Mailing Preference Service at post by registering with the or by phoning

once, and offers tips on reducing unwanted mail. www.mpsonline.org.uk or by phoning 0845 703 4599. This is free.

14 IF YOU NEED DEBT ADVICE GET HELP FROM DERBY CITIZENS ADVICE & LAW CENTRE. OUR ADVICE IS FREE, IMPARTIAL AND CONFIDENTIAL.

15 WHAT TO DO IF YOU HAVE BEEN A VICTIM OF A SCAM? If you have lost money to a scam, report it to the police and Action Fraud, the national fraud reporting centre. Call Talk to an Advisor here at Derby Citizens Advice & Law Centre.

and Action Fraud, the national fraud reporting centre.

16 You can find out more about the most common scams on the websites below

Facts TIPS FOR CONSUMERS ON AVOIDING FORECLOSURE RESCUE SCAMS

Facts TIPS FOR CONSUMERS ON AVOIDING FORECLOSURE RESCUE SCAMS NATIONAL CONSUMER LAW CENTER INC p Consumer 77 Summer S treet, 10th Fl Boston, MA 02110 617 542-8010 www.nclc.org Facts for Older Americans TIPS FOR CONSUMERS ON AVOIDING FORECLOSURE RESCUE SCAMS Older