Debt Elimination Scams to Avoid - You’ll Just Pay Twice
Actually, you should avoid all of them. There are so many, it would be impossible to list them all, so I’m going to cover a couple of the more prevalent ones. If you are trying to get debt free, as so many are in this, the ‘Golden Age of Credit’, the last thing you need is for some unethical, or downright criminal organization to relieve you of your hard earned money. Here are 2 ways they might try to pull the wool over your eyes so they can steal your wallet.
1) The Debt Elimination Letter – You’ll lose big on this one. The basic line is that, for a fee, typically a rather large one, the debt elimination agency will send you a letter that you can show your creditors to get your debts waived. I’m sure many people would love such a letter, but it doesn’t work that way in the real world. Use the money to actually retire some debt instead. The agencies claim that many of the fees the credit card companies charge are illegal, and, as such, the entire debt is void. These dream letters will be called a “Bond for Discharge of Debt”, or some variation thereof. These can also be termed “redemption Certificates”.
On the face of it, most people know that sounds too good to be true, and that’s precisely what it is. If large banks and credit card companies made a common practice of charging illegal fees to customers, court cases would be a-flying. Bottom line, these letters and certificates are debt elimination scams, plain and simple. Don’t ever give one of these debt scam organizations your money.
2) Credit Card Illegality Scam – This beauty is a little similar to the debt scam outlined above, but the rationale is a little different. In this version, the claim is that, because you’re borrowing your own money, the entire credit card system is illegal and since it’s illegal, the debt is illegal as well. Get real! Although it may be very tempting to fall for such crap, run, don’t walk away from the $1,000 to $5,000 up front fee such con men will try and extort from you.
As consumer debt increases in the U.S. to the tune of around 5% annually, more people are becoming seriously over extended. Thus over extended, many will succumb to the temptation to just get out from under the whole mess. The interest on credit card debt, an average of 14.67% in Q3 of this year, makes it really tough for those who’ve gotten themselves in too deep to climb out. Well, climb you must. There’s no free lunch, and no debt elimination certificate, either.
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Comments
Great post. It is sad that people would take advantage of those already in a bad situaton. The reality is that we all have to be on the look out for those trying to scam us when we are most vulnerable.
Regards,
Finance-4-Kids
Posted by: Finance-4-Kids | December 4, 2006 05:04 PM
People are VERY funny. I think it's why "Get Rich Quick" and any other pie in the sky services are so popular-- people just hunger for a quick easy fix.
You offer them a real solution-- i.e.- Set up a Plan and learn to live on your income and they are slow to take it.
I understand people's need for hope, it's the "greatest of things" (Shawshank Redemption)
But I wish they would understand that hope comes in the form of lifestyle changes, not circumstance changes.
Posted by: Berry | December 6, 2006 08:34 AM