Security Corner Blog

When debt starts to feel overwhelming, finding help can feel like the first step toward getting back on track. Unfortunately, scammers know that and they may use promises of quick debt relief to target people looking for solutions.

The Federal Trade Commission (FTC) recently shared guidance on how to recognize debt relief scams and protect yourself when looking for help. Before sharing your financial information or signing up for a debt relief service, watch for these red flags.

Red Flag #1: They Ask for Money Up Front

Be cautious if a company asks you to pay a fee before providing debt relief services.

According to the FTC, legitimate debt relief organizations should not charge you in advance for services they haven’t provided. Be especially cautious of anyone asking for an upfront payment before settling your debts or enrolling you in a debt management plan.

Before paying, ask: What exactly am I paying for, and what services will I receive?

Red Flag #2: They Guarantee Results

Promises like “we can eliminate your debt” or “we guarantee you’ll get fast loan forgiveness” should raise a red flag.

Your financial situation is unique, and there’s no one-size-fits-all solution to debt. A legitimate counselor should review your finances before recommending a strategy, not guarantee a specific outcome.

Red Flag #3: They Contact You Unexpectedly

An unexpected call or text promising to settle your debts quickly can be a warning, especially if they ask for personal or financial information.

If someone contacts you unexpectedly, don’t feel pressured to respond immediately. Instead, research the organization independently and use contact information from a trusted source.

Red Flag #4: They Don’t Review Your Finances

A legitimate credit counseling organization should take the time to understand your financial situation, including your income, expenses, and debts.

Be cautious of a company that immediately pushes you toward a specific program without asking questions about your finances or explaining your options.

Red Flag #5: You’re Pressured to Act Fast

Scammers may use urgency to keep you from taking time to research their claims.

If someone tells you to decide immediately, stop and take a step back. Get the details in writing, research the organization, and make sure you understand the terms before moving forward.

How to Find Legitimate Debt Help

If you’re looking for help managing debt, start by researching reputable organizations that provide financial education and counseling.

One resource is GreenPath Financial Wellness, a national nonprofit that offers free, confidential financial counseling. GreenPath’s NFCC-certified counselors can review your financial situation, help you understand your options, and guide you on managing debt. (GreenPath Financial Wellness)

You can also explore GreenPath’s resources for budgeting, debt management, and strategies for paying down credit card debt.

Explore GreenPath’s free debt counseling resources.

Take Your Time. Do Your Research.

Getting out of debt doesn’t happen overnight, but having a clear plan can make the process feel more manageable.

Before working with a debt relief company, research the organization, understand its fees and services, get agreements in writing, and avoid anyone promising a quick or guaranteed solution. If you believe you’ve encountered a debt relief scam, the FTC recommends reporting it at ReportFraud.ftc.gov. (Consumer Advice)

Want to Build a Debt Payoff Plan?

Debt can feel easier to tackle with a clear plan. Join us next Wednesday for our Debt Payoff Strategies webinar to learn how to understand what you owe, explore different approaches to paying it down, and make informed decisions based on your financial goals.

Register for the webinar: [Webinar Registration - Zoom]