Beware The Debt Management Scam – Avoiding Fraudsters And Managing Your Debt

Since the credit crunch, debt has become a massive problem. Thousands of Americans are struggling every day beneath a mountain of debt. This is a horrible situation to be in, and can even make people ill. There is, of course, a solution – they simply have to call a reputable debt settlement attorney who will help to lift the enormous burden of debt from their shoulders in a manner best suited to their needs. Unfortunately, difficult times often leave people vulnerable to the kind of unscrupulous lowlifes who will take advantage of the misfortune of others. Thousands of Americans are falling prey to debt management and related scams – a problem about which awareness desperately needs to be raised.

Taking The Bait

It’s an extremely tempting prospect. You’re struggling with debt, stressed to an extreme, the thought of payments you can’t make preying on your mind. Perhaps your mental health is even suffering. Every time your phone makes a noise you feel sick, sure that it must be yet another creditor ringing to pester you for more money which you cannot afford. It’s a dreadful life, and one from which you struggle to see a way out. And then, out of the blue, one of those dreaded phone calls turns out to be from a pleasant-sounding person who soothingly tells you that they can take your debts on board for you. They will negotiate with your creditors, they will make affordable monthly payments for you. They will, in short, do everything which a responsible debt management company should do for their clients. It’s a huge relief. You are told to hang up on your creditors as your debt is no longer your responsibility. No longer must you fear your phone! All they ask in return is an affordable monthly fee to help pay off the debt and cover their expenses. It seems a lifeline, at which desperate people eagerly grasp. You pay the company, and you sit back with a sigh, waiting for the burden of debt to be lifted from your shoulders.

The Harsh Reality

Yet the creditors keep ringing, and they don’t stop – even after the period in which you were expecting your debt to be taken on by the company. In fact, the calls become more frequent, and more insistent. It’s all a little perplexing. This perplexity turns to worry as you wonder what on earth this company are doing (after all, they’re taking your money, so SOMETHING must be happening, right?) Is the fault with the company, or the creditors? You phone them up, and are given some mollifying rhetoric which is vaguely comforting for a while, but the phone calls, letters, emails and so on keep coming. Then, one day, a court order lands on your mat – one of your creditors has had enough, and intends to use the legal system to make you pay. You are in utter despair. You phone up the authorities and try to tell them that your debt should have been handled by such-and-such a company…only to be informed that no such information or money was ever received by your creditors. You, like many others worldwide, have been duped by an unscrupulous conglomerate of criminals wishing to profit from the bad fortune and desperation of others. This puts you in an extremely difficult position. You have made a number of payments to these people, which you naturally wish to reclaim – but you are also knee deep in debt and thus cannot afford to take them through the courts. Besides which, such a procedure would expose you, your debts, and your gullibility to the public eye, which you do not want.

A Global Problem

It is for these very reasons that such criminal enterprises are so successful. Not only do they know that the supposed service they are offering is very attractive, they also know that they can get away with it. It’s a worldwide problem. Since the credit crunch, an entire industry has built up around making money from people in need of financial help – of which there are far, far many more than there used to be. In parts of the world like the UK, the unscrupulous nature of payday loan companies and false debt-management fraudsters has attracted a lot of attention after plentiful journalistic investigations into the phenomenon, and the tightening of government regulations regarding debt-related business. The British and people in much of Europe are, as a consequence, much more aware of the kind of fraud which can be perpetuated, and know to turn to comprehensive comparison guides on things like debt consolidation loans, thus ensuring that ‘you don’t pay more than you need to when you consolidate loans’ .  However, this has only been brought about due to the British legal system – which allows those wronged by debt management fraud to prosecute the criminals without paying legal fees (assuming that they win the case) – and the vociferous media attention that such cases have attracted. Here in the US, the problem remains somewhat beneath the radar, making Americans vulnerable. Clearly it is essential to be aware that this kind of thing goes on, and get professional help if in debt trouble rather than relying on the promises of a calm but unknown voice at the end of the phone.

Warning Signs

There are a few things to watch out for in these cases. For a start, any company contacting you out of the blue and making a concerted effort to inveigle bank details out of you there and then, over the phone, should get alarm bells ringing. Furthermore, many of the more dubious companies will endeavor to persuade you to commit to a direct debit or standing order in the initial phone call. This is highly indicative of a charlatan operation which does not have your best interests at heart. Many of these companies sound extremely professional at first – they may take a detailed debt history, go through your budget and so on – but the bottom line is, if they want money or payments set up there and then, be extremely wary. If they’re offering you a debt consolidation loan, note that it is completely illegal for companies to call, offer you a loan, and then request a fee in advance of the transaction’s completion. Be sure to also run background checks on any company which calls you and purports to have a not-for-profit status. A couple of extremely legitimate-sounding, supposedly not-for-profit debt management schemes have been exposed by the FTC for creaming payments ostensibly for the payment of creditors away to a profiting account.

The Only Sensible Solution

Essentially, if you are having problems with debt, the best thing possible to do is not to rely on the promises made by an out-of-the-blue phone call, but to contact dedicated professionals with a proven track record in the area, who will be able to sort you out with some form of debt settlement process, and give you your life back.

Shah Peerally is an attorney licensed in California practicing immigration law and debt settlement. He has featured as an expert legal analyst for many TV networks such as NDTV, Times Now and Sitarree TV. Articles about Shah Peerally and his work have appeared on newspapers such as San Jose Mercury News, Oakland Tribune, US Fiji Times, Mauritius Le Quotidien, Movers & Shakers and other prominent international newspapers. His work has been commended by Congress women Nancy Pelosi and Barbara Lee.  He has a weekly radio show on KLOK 1170AM and frequently participates in legal clinics in churches, temples and mosques.

 

For updates follow us onYoutube, Radio, Facebook, Twitter and LinkedIn.  Shah Peerally Law Group PC deals in immigration law  - www.peerallylaw.com and www.immigrationlegalblog.com

Attorney Shah Peerally also deals in debt settlement. For more information call us on 510.742.5887 and visit us on www.YourDebtSettlementAttorney.com.

Information provided above is for educational purposes only.  One should not act or refrain to act solely based on the information provided.  You should consult an attorney to assess your case before proceeding.

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Disclaimer: The views expressed on this website are not necessarily those of Shah Peerally or his law firms. No attorney client relationship is created by reading any message or articles posted on this blog.