If you have a lot of credit card debt and are looking for relief, be careful whom you ask for help. Some agencies claiming to offer mortgage, tax and debt relief services may be exaggerating their claims. Because of such misrepresentations, the Federal Trade Commission (FTC) recently filed a complaint against an individual who allegedly used multiple Web sites to impersonate federal consumer assistance agencies.
No government affiliation
The FTC charged Christopher Mallett, a "lead generator" based in Texas, with misrepresenting his affiliations with federal agencies, misrepresenting that services offered through his websites were approved by the government, and making deceptive debt relief claims. Mallett did business under the names Department of Consumer Services Protection Commission, U.S. Debt Care, World Law Debt, U.S. Mortgage Relief Counsel, gov-usdebtreform.net, worldlawdebt.org, usdebtcare.net and FHA-homeloaninfo.
The FTC alleges that Mallett used the FTC's official seal and copied portions of its website to give the appearance of being affiliated with the government. His sites also claimed that the FTC "monitors and researches" member companies that provide financial help to consumers. Mallett's websites have never been affiliated with the U.S. government despite the claims.
Exaggerated debt relief claims
Debt relief scams often make outrageous claims that consumers can substantially reduce their debt. Mallet also allegedly made claims about credit debt relief that were false or unsubstantiated. Anytime you are thinking about getting help from a debt relief firm, it's important to thoroughly check out the company's credentials.
There also are some red flags that should alert you to a possible debt relief scam, including:
- Promises that credit card debt and other bills can be settled for pennies on the dollar. There is no guarantee this will occur.
- Debt relief that requires significant monthly services fees or fees that equal a percentage of the money you supposedly saved.
- You are told to stop making payments on your monthly debt bills.
There are other signs that could indicate a debt relief scam, so be very cautious about signing up for any plan. The best bet for getting credit debt relief is to negotiate directly with your creditors.