INDIANAPOLIS, Ind – The Federal Trade Commission is warning Americans to be on the lookout for shady companies, who are trying to take advantage of consumers’ large credit card balances.
America’s credit card debt reached $930 billion at the end of last year, which is more than 18% higher than the year before. So it’s no surprise that some bad actors are praying on people who are desperate to get out of debt.
In November, the FTC went after three businessmen, who were running a deceptive debt relief scam that took millions of dollars from victims. The scheme targeted mostly older Americans with false promises of eliminating or greatly reducing their credit card debt. That operation has been shut down, and the FTC is still working to hopefully get victims some kind of refund.
In the meantime, the FTC warns that there are plenty of other crooks out there who will promise to help you, but might leave you high and dry and even deeper in the hole.
In order to keep from being a victim, the FTC suggests these tips:
- Never pay up front. It’s actually illegal for a debt relief company to charge you a fee before they do anything to relieve your debt.
- Talk to your credit card company for free. You might be surprised by how willing they are to work out some kind of payment plan or possibly reduce your interest rate.
- Consider a reputable credit counselor. Those won’t be the companies that cold call you or send you junk mail. You often find nonprofit credit counselors through credit unions or universities. Your bank or financial institution might also be able to point you in the right direction.
The FTC has more helpful suggestions about finding the right credit counselor. If you have been targeted by one of these shady operations, you should report them to the FTC so the agency can start collecting information on them. You probably won’t be the first person to report them, and every report helps to build a case against illegal operations.