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This article was last updated Mar 30, 2013, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
Falling into debt is easy. Getting out of it is another story. In the quest for debt relief, you might find yourself looking for help on the internet, much like you're doing as you read this article. There are plenty of legitimate debt help programs online that can show you how to manage your money, but there are also hundreds of scams that you have to watch out for. They lure you in with the promise to end credit harassment or promise to "wipe out" all your debts. Make the wrong move, and you could fall even further into debt.
I have personally been a victim of an online debt relief scam, so I know firsthand the ramifications that follow. Perhaps my experiences will show you what to avoid in the future. Here are some tips on how to spot debt scams online.
How Debt Relief Programs Are Supposed to Work
In an ideal setup, a debt relief program is supposed to provide you with tips, suggestions and solutions to your current debt problems. Some are made to simply give you a large set of information to read over. Others actually put you in contact with debt experts who evaluate your situation and tailor a way for you to get out of debt. The first option is more independent than the second, but they can both lead you to financial freedom – potentially.
How Online Debt Relief Scams Work
In order to identify a scam from a true relief program, you have to know how most scams work. Everything starts with your credit card information. Somewhere along the way, you will be asked to put a credit card on file, perhaps just to "verify your identity." Some relief programs will in fact do this, but others will store the card to charge later. In the fine print of the terms and conditions you agree to, there will be a place that authorizes a certain charge on that card, like a monthly service fee or a one-time annual fee. If you are not careful, you could end up giving the company permission to charge your account.
That kind of scam is the most deceptive one online, but it is not the only one. You might sign up for a program that blatantly tells you what you will be charged, and then you can decide to pay it. The problem that comes with those programs (should they be scandalous) is that the staff members that run them are not debt relief experts. They cannot provide valuable advice, and many of them will not even assess your situation. All they will do is direct you to an agency that they earn referral commission from.
Simply put, there's a "catch" with every scam you come across. The sooner you identify it, the more capable you will be at avoiding it.
How to Avoid Debt Relief Scams Online
Don't want to be the victim of a debt help scam? Follow these quick tips:
- Always read the fine print before signing up for something. Make sure you look for any hidden fees that may come up in the future.
- Talk to the customer service department on the phone. The phone agents may be just as sneaky as the fine print in the website, but at least you can drill them for important details.
- Look at reviews on other websites. The testimonials on the debt relief site are obviously going to be positive, so look for opinions elsewhere. If they're bad, you know what to avoid.
- Check out the Better Business Bureau. Not all debt relief programs online will have a BBB ranking, but those that do can be assessed through it.
- Use a prepaid debit card for your account. That way if the company tries to charge more than what you authorize, they won't be able to take out the funds.
- Keep an eye on your accounts. The second you see any suspicious activity, cancel your card and file a fraud report.
If the Chief Justice of the Supreme Court can be hit by credit card fraud, anyone can. Be cautious with any program you sign up for, and you should be able to protect your money and your credit.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.