Tags: avoid | debt | scams

How to Avoid Debt Elimination Scams

Friday, 23 Oct 2009 09:19 AM

By Bruce Mandelblit

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America is in the grip of the worst economic situation since the Great Depression. With unemployment rates on the rise, many households are struggling with mountains of debt, including “underwater” mortgages, expensive car loans, and maxed-out credit cards.

In fact, according to The Wall Street Journal, American household debt is at a near record of 122 percent of disposable income, and unemployment is likely heading to a national average of 10 percent.

Given these hard economic times, you can bet that there will be cold-hearted crooks and nasty scam artists just waiting to take advantage of cash-strapped individuals and their families.

One of the latest and most popular rip-offs is the so-called “debt elimination scam.”

According to the Internet Crime Complaint Center (ICCC), here is how the debt elimination scam works:

Debt elimination schemes generally involve Web sites advertising a “legal way” to dispose of mortgage loans and credit card debts. Most often, all that is required of the participant is to send $1,500 to $2,000 to the subject, along with all the particulars of the participant's loan information and a special power of attorney authorizing the subject to enter into transactions regarding the title of the participant's homes on their behalf.

The subject then issues bonds and promissory notes to the lenders that purport to legally satisfy the debts of the participant. In exchange, the participant is then required to pay a certain percentage of the value of the satisfied debts to the subject.

Quick Security Tip: The risk of identity theft associated with the debt elimination scheme is extremely high because the participants provide all of their personal information to the subject.

So what can you do to help prevent becoming a victim of the debt elimination scam?

Here are some debt elimination scam prevention tips and ideas provided by the ICCC:

  • Know who you are doing business with — do your research.

  • Obtain the name, address, and telephone number of the individual or company.

  • Research the individual or company to ensure authenticity.

  • Contact the Better Business Bureau to determine the legitimacy of the company.

  • Be cautious when dealing with individuals outside of your own country.

  • Ensure that you understand all terms and conditions of any agreement.

  • Be wary of businesses that operate from P.O. boxes or mail drops.

  • Ask for names of other customers of the individual or company and contact them.

  • If it sounds too good to be true, it probably is.

    If you think you have been the victim of a debt elimination scam, contact your local law enforcement agent and file a complaint with the ICCC.

    For more information debt elimination scams and prevention tips, go to the ICCC Web site at ic3.gov.

    My Final Thoughts: Although there are many legitimate agencies and organizations that may be able to help folks with their debt problems, there are, unfortunately, some evil thugs that are just trying to take advantage of already suffering people.

    Be sure to take the time to properly research and locate any legitimate agencies and organizations within your community that might be able to truly help you with managing your debts.

    Don’t let these debt elimination scam rip-off artists make an already-tough money situation even worse.

    Copyright 2009 by Bruce Mandelblit

    Bruce Mandelblit (www.CrimeZilla.com) is a nationally known security and safety journalist, as well as a recently retired, highly decorated reserve law enforcement officer. His e-mail address is CrimePrevention123@yahoo.com.

    This column is provided for general information purposes only. Please check with your local law enforcement agency and legal professional for information specific to you and your jurisdiction.

  • © 2014 Newsmax. All rights reserved.

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