What is Debt Relief Fraud?

It's no secret that the U.S. economy is struggling.  More consumers have found themselves in financial ruin with debt steadily accruing.  The increasing amount of debt has led to more serious issues - specifically, a growing rate of fraud. As the letters baring collections, repossessions and foreclosures continue to trickle in, desperate consumers are liable to believe anyone who claims to have the ability to rectify their pressing financial issues.  From there, a bad situation becomes worse, and the financially strapped become easy prey for astute con artists, signing their name on the dotted line without giving it much thought.

The telltale signs of debt relief fraud

Debt-related fraud has grown to popularity due to the many available marks surfing in cyberspace.  Many of these scams are initiated through links placed on legitimate web sites.  They often persuade users into agreements denying support from the debt elimination site - this method alone is considered to be fraud.  

Debt elimination fraud generally require a large deposit; anywhere from $2,000 to $3,000.  When the money is transferred, the organizers of the scam provide the victim with what appears to be a genuine legal document.  The victim is then instructed to present the document to their bank, mortgage company, credit card issuer or lending institution to settle their debt.  Unfortunately, the document provided is a fake and not worth the paper it was printed on.  These fraudulent documents are often well designed, and typically question the authenticity of a victim's financial obligations.  It may also refer to a known government entities such as the Federal Reserve, a tactic used to add a sense of legitimacy to their claim and fool the consumer. 

Debt elimination programs purporting as government approved services can be easily identified as scams.  The Federal Reserve or any other government program has absolutely no involvement in programs intended to eliminate a consumer's debt obligations.  

Fixing your debt without falling victim to fraud

Since most people who fall victim to this type of fraud initially seek legitimate sources to manage their debt, it is important to recognize the many secure options that are available.  Below we have listed a few ways you can effectively manage your debt without being victimized by a malicious scam: 

Save money to repay it

• Arrange a negotiation with the institution you're in debt to

Attempt to settle the debt - you will be surprised at how many institutions are willing to settle accounts for less than half of the amount owed

Declare bankruptcy

Inquire within a reliable debt consolidation program.  These services will speak on your behalf to reason with creditors in attempt to lower your monthly payments

Open an account at a credit union.  Many credit unions will help you create accounts where the debt you owe is directly collected, reducing the chance of inappropriate budgeting. 

Finding yourself in debt is bad enough - becoming a victim of debt elimination fraud only complicates matters and lengthens the road to financial recovery.  When attempting to settle the money you owe, it's important to take your time and make a wise decision.  Acting on the first offer that sounds good could send you plummeting into a pool of debt that's nearly impossible to scale.

Debt consolidation can solve serious debt issues reinforced with proper funds management.  Find out more.

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