Getting help with your debt can be a vulnerable, emotional process. And when you take the leap and reach out for support, there’s a chance you’ll instead meet a scammer waiting to kick you while you’re down.
Anyone can get scammed, and debt scams are more common than you’d think. This guide will help you spot red flags fast so you can protect your money, time and energy to get debt-free.
How to Tell a Scammer vs. Legit Debt Help
Scam companies often make flashy, too-good-to-be-true claims to catch your attention. If you encounter any of these statements, it’s a good idea to hit the brakes.
“Guaranteed Results”
No company can promise that they will be able to change your repayment terms. Real companies will explain that results depend on your situation and the creditors involved — results are not guaranteed, and anyone saying otherwise isn’t being honest.
“Special Government Programs”
Scammers think invoking “government programs” is a surefire way to dupe consumers into trusting their untrustworthy operation. Legit companies may explain general rules or benefits, but they won’t claim to be part of a secret or exclusive federal program. Keep an eye out for “special programs” that “won’t last,” too — forcing you to decide right then and there is suspect behavior.
Beware of Sketchy Ads, Emails and Calls
A lot of consumer information is available online, and scam companies often find people through cold calls, emails or targeted ads. But no matter how they contact you, they’ll typically try to get your financial information — and money — as soon as possible.
If you encounter someone asking for money upfront in exchange for debt help, don’t work with them. It’s illegal for debt help companies to charge you before they provide a service.
Quick Background Checks You Can Do
Do your research before sharing any information with the individual or company who reached out to you.
Start by searching the name of the company and “complaint,” but be wary of your findings. Prioritize reviews left through reputable sites, like Trustpilot or the Better Business Bureau. Reputable businesses have sites that are consistent and accessible, with call-outs about awards they’ve won, where they’ve been featured and recent news articles featuring their service.
If you’re really not sure, err on the side of caution. (We know a great, legit and reliable debt consolidation company you can check out instead!)
Questions to Ask That Scammers Hate
If you’re on the phone with someone and not sure if they’re legit, ask questions. Real companies will answer clearly, while scammers will try to smooth talk you. Counter them with questions, and don’t take vague responses for an answer. Try:
“What Are Your Fees?”
You deserve to know what you’ll be charged and when. If they dodge this question or give a vague answer, that’s not a good sign.
“Are You Licensed in My State?”
This is a simple question that honest companies will answer without hesitation. If the person on the phone doesn’t know, avoids the question, or gets defensive, hang up.
Where to Report a Bad Actor
If you think someone is running a scam or using shady tactics, don’t keep it to yourself. Here’s where you can report them:
- Federal Trade Commission (FTC): https://reportfraud.ftc.gov/
- State Attorney General: Find yours at https://www.naag.org/find-my-ag/
- Better Business Bureau (BBB): https://www.bbb.org/file-a-complaint