Debt Relief Scams

The biggest nightmare for a credit card holder is to get drowned in piles of debt and have no way out. Many people go overboard with enjoying the luxuries and conveniences that come with credit cards and end up with big debt amount. As a result, they are unable to clear off the balances, which further leads to accumulating interest. 

Credit card companies in Canada charge interest on a daily basis. Furthermore, they follow compound interest principle for charging these fees.

The rate of interest varies from credit card companies in Canada and the type of cards an individual receives. However, no matter which company you have got your card from or the type of card you have selected, the accumulating interest and growing debts can be hard to pay off. This is why many people, who land in such distressing situations, tend to look for debt relief programs and this is where they are at the risk of falling to debt relief scams.


What is a Debt Relief Scam?

A debt relief fraud occurs when a company promises to eliminate the debt of an individual. However, they do nothing as promised and work in an opposite manner. These companies tend to withdraw a monthly fee from the consumer’s account instead of paying it to creditors.

As a result, the consumer faces huge losses. In addition to that, their credit score badly suffers since the creditor i.e. the bank or credit card company does not get their money on time. The debt continues to increase and so does the interest. The situation becomes way too difficult to get out from for the cardholder.


Who Falls Prey to These Scams?

As discussed above, people with overwhelming debts, who have no other option to clear off the balances, fall prey to these scams. These companies specifically target those people and lure them in with false promises to clear off their debts.


How Can You Identify a Debt Relief Scam in Canada?

There are a number of debt relief companies offering their services in Canada. Hence, it can prove to be a difficult task for an individual, who is already facing the stress of overwhelming debts, to distinguish between companies that offer reliable services from a scam. However, there are certain factors that can help an individual to identify a scam. Have a look at them:

Unrealistic Promises

These fraud companies make false promises that are far from being practical. For example, they may promise you to lower the amount of debt you have. This is the point where people become a victim of such scams. The promises are attractive and lucrative; hence, hard to resist.

Immediate Action

Quite often, these companies will demand an immediate action from you. They will either be too quick in asking your confidential information such as credit card numbers or ask you to take other instant actions. If your debt relief company is asking you to do so, it is recommended to stop interacting with them and look for reliable professional services. Never make the mistake of sharing your confidential information with them as it can land you into the further stressful situation.

Advance Money

If your debt relief company is asking for advance money as their service fee before taking any particular action, most likely it is a fraud.


Tips to Avoid Becoming a Victim of Debt Relief Scams

Here are a few tips that can help you to avoid becoming a victim of such scams in Canada.

1. Make sure the debt relief company you are negotiating with has a strong online presence. To do this, check out their website, look for customer reviews, and visit their social media profiles.

2. Use Canada 411. It is Canada’s people directory where you can get information about a company. This website also enables visitors to perform reverse research. This means you can enter a phone number or an address and get related information. Therefore, if you are in contact with a debt relief company use Canada 411’s reverse research feature and look for information related to this company. If there is no information, it is better to consult any other company since there are more chances of the company being a scam.