Looking for debt relief? Here’s how to avoid a scam

If you’re dealing with a lot of debt, you might be looking for help. Some companies offer a range of free and paid services, like budget counseling and debt management classes. But others are dishonest and will take your money for the promise of getting rid of your debt — just to leave you even worse off. So, how can you avoid scams while you’re trying to pay off your debt?

When it comes to debt relief services, only scammers will tell you to pay them upfront before they settle any of your debts or enter you into a debt management plan. And anyone that guarantees to settle all your debts or get you fast loan forgiveness is a scammer. So if you get an unexpected call or text offering to settle your debts fast and asking you to share personal or financial information, that’s a sure sign of a scam. Don’t respond or share any information.

If you’re in debt, there are ways to get real help. Here are some things to know:

• Reputable credit counseling organizations should send you free information about their services before you say anything about your situation. Look for an organization that will do a thorough review of your finances and won’t charge in advance for help it hasn’t given yet.
• Your local credit union, university, community college, or military personal financial manager might offer low-cost credit counseling programs. Before you sign up, find out how much they’ll charge.
• Consumer.gov has information about steps to take yourself (like making a budget) to help you get out of debt, get help when you’re in debt, and what to know if you’re getting calls from debt collectors.

If you spot a debt relief scam, tell the FTC at ReportFraud.ftc.gov.