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Credit card debt relief phone offers are often scams

by | Jan 16, 2013 | Credit Card Debt, Firm News

California residents who are struggling under heavy loads of consumer debt can experience an enormous amount of stress related to their financial circumstances. For many, their existing level of credit card debt seems insurmountable, and they don’t know where to begin in addressing the problem. Then, at what seems like just the right time, the phone rings and the person on the other end offers a fast and easy solution to debt relief. The chance to ease their financial turmoil is appealing to many, and thousands of consumers fall victim each year to phone solicitations that actually scams.

The Federal Trade Commission (FTC) warms consumers that many of these calls are generated by computer, and are not legitimate debt relief options. The agency receives as many as 200,000 consumer complaints concerning these types of telemarketing efforts each month, which gives some insight into the reach of these scams. Many of the companies are in violation of the FTC Act, which prohibits the use of telemarketing to promote debt relief services that ask for an up-front payment for services to be received at a future time.

The FTC warns consumers that these callers will promise that consumers will be ‘approved’ for a debt relief program that can lower their interest rates and lead to savings of thousands of dollars in a very short period of time. Once a consumer pays an up-front fee, they can expect to start receiving these benefits. However, after paying anywhere from a few hundred to a few thousand dollars, consumers are left with little to no assistance in reducing their debt.

True debt relief only comes in two forms. Consumers can tackle an aggressive debt reduction program in which they pay down debt over a period of time. This approach is a good solution for consumers who have sufficient income to cover their living expenses and their debt service, and can lead to the eventual elimination of credit card debt. For those who cannot afford this option, personal bankruptcy can bring about the discharge of the majority of consumer debt in a relatively quick timeframe. Following bankruptcy, California consumers can begin to slowly rebuild their credit and savings, making way for future financial success.

Source: Tulsa World, “Debt-reduction phone solicitations often are scams,” Jason Powers, Dec. 26, 2012