Beware of Those Promising Debt Relief
Posted: Sunday, October 04, 2009
by Bill Cash
If you are in a financial bind with bills piling up and are like most people, you will start panicking and getting desperate. You will start looking for options. When you do, you start seeing ads for "quick relief", "no borrowing required", "consolidate your debts – all legal".
What they don't tell you in a lot of these instances is that they really are promoting bankruptcies. Bankruptcy fits the above definitions but is always a last resort because it has long-term, significant and negative impact on your creditworthiness. A bankruptcy stays on your credit report for 10 years, and can prevent you from getting credit, a job, insurance, or even a place to live.
These scams often go after people with bad credit problems or have maybe no credit. They say, that if you pay them an up-front fee, they will "guarantee" that you will get the credit you want, which is usually a credit card or a personal loan.
Now there really is nothing good about these advance-fee loans. They mostly require an up-front fee of a few hundred dollars, and, in the worst case situation, they may even be illegal.
So, how do you recognize an advance-fee loan scam? These ads for advance-fee loans often appear in the classifieds of local and national newspapers and magazines. They also may appear in mailings, radio spots, and on local cable stations. Often, these ads feature "900" numbers, (for which there is an exorbitant charge to your phone bill if you call it).
Additionally, these companies often use delivery systems other than the U.S. Postal Service, such as overnight or courier services, to avoid detection and prosecution by postal authorities.
Lastly, if someone like this calls you up, and says they can guarantee you a loan –if you pay them upfront -- hang up on them. Remember it's against the law so don't bother dealing with them.
Now it's not hard to confuse a legitimate credit offer with an advance-fee loan scam. A valid offer for credit from a bank, savings and loan, or mortgage broker generally requires your verbal or written acceptance of the loan or credit offer. The offer usually is subject to a check of your credit report after you apply to make sure you meet their credit standards. Usually, you are not required to pay a fee to get the credit.
Legitimate creditors may offer to increase your line of credit, but they do this through telemarketing. They will also almost always require an application fee or appraisal fee in advance. But a legitimate creditor will never guarantee in advance that you'll get the loan without checking out your financial background. Under the Federal Telemarketing Sales Rule, a telemarketer who guarantees, or highly suggests, that you will probably get a loan or extension of credit, may not ask for the upfront payment until you've received the loan.
If in doubt about anything along these lines just call you local bank. They can help you sort things out and maybe even help your debt problems also.
Bill has been writing articles for over 5 years. Come visit his latest website over at www.BiometricGunSafeReviews.com which helps people find a fingerprint gun safe and which is the best for keeping guns stored safely away.
This Article has been viewed 66 times. (Not updated in real-time.)
No comments yet.We want your comments! If you can read this, you don't have javascript enabled, so you can't use this comment system. Please enable javascript.