Fixing Your Finances for the New Year? How to know if a debt relief company is legitimate

The New Year is a time when many people decide to get their finances in order. You may want to be careful if you are looking for a company to help you. Today we’re answering a question about debt relief and credit repair fraud.

You may receive offers from companies that help you get rid of your debt. Not all businesses are the same, so do your homework before submitting all of your information.

Question: “Is (the company) Citizen’s Debt Relief a scam? Is it possible to work with them to consolidate your credit card debt by giving out your social security number and your credit card numbers? “- Nickname

(Copyright 2021 by KPRC Click2Houston – All rights reserved.)

A: We did some checking and Citizen debt relief is a legitimate business. The Better Business Bureau gives it a 4.67 out of five stars. There are minor complaints, but nothing about fraud. And yes, you will have to give your personal information to a company working on your finances.

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The Texas Attorney General’s Office says a debt relief business can be bogus if:

  • They contact you first

  • They charge upfront fees

  • Offer recurring monthly fees for the service

  • Require you to sign a contract immediately

  • Treat yourself to a special deal on federal loans. Businesses cannot do this, federal loan repayment levels are set by law.

  • Pressures you to sign a “third party authorization” or “power of attorney”

  • Request your Federal Student Aid PIN

  • Uses a name or logo that gives the impression that the business is a government agency or is associated with a government agency

the Federal Trade Commission Also tracks debt relief and credit repair scams. Here’s what they say about the work they do to track down these scam companies.

“The FTC has launched numerous law enforcement actions against these bogus credit-related services, and the agency has partnered with states to bring hundreds more lawsuits. Additionally, in 2010, the FTC changed its telemarketing sales rule to protect consumers seeking debt relief services, such as debt settlement or credit counseling. The Rule prohibits for-profit businesses that sell these services over the telephone from charging a fee before actually settling or reducing a consumer’s debt. It also prohibits debt relief providers from making false claims and requires them to disclose key information consumers need to rate these services.

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Need help getting out of debt? The FTC has free resources to help people trying to settle their finances.

(Copyright 2021 by KPRC Click2Houston – All rights reserved.)

Just ask and they will send you information on how to get out of debt or budget.

If you have a question you’d like our team to answer or have a story idea for Amy, send it to [email protected].

Copyright 2022 by KPRC Click2Houston – All rights reserved.

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