Promised quick debt erasure only to lose thousands to scammers? In 2025, FTC crackdowns expose rampant debt relief frauds impersonating legit services. Arm yourself with red flags and avoidance tips to safeguard your finances—don’t let con artists deepen your debt hole.
Debt relief scams prey on stressed consumers, promising settlement or consolidation miracles but delivering nothing. The FTC halted operations like those impersonating businesses or government entities, scamming victims out of fees for non-existent services.
Common in student loan relief, these schemes lure with false forgiveness promises, charging upfront despite being illegal.
FTC refunds over $356,900 in 2025 to student loan scam victims highlight the scale. Scammers pose as FTC affiliates or use AI voices, demanding payments via gift cards or wire transfers.
Legit debt settlement negotiates reductions on unsecured debts, while consolidation combines them—both free to explore via non-profits or attorneys. But scams guarantee results, ignore your rights, or vanish after fees.
FTC warns: No company can do what you can’t for free, like contacting lenders yourself.
Red Flags to Spot Scams in 2025:
- Upfront Fees: Illegal for telemarketed services; pay only after results.
- Guaranteed Outcomes: No one can promise specific savings or credit fixes.
- Impersonation: Fake government ties or urgent threats; verify via official sites.
- Pressure Tactics: Rush decisions without details; legit firms provide written agreements.
- Unusual Payments: Avoid wire, crypto, or gift cards—scam hallmarks.
Avoidance Tips:
- Research via BBB or FTC; use non-profits like NFCC for free counseling.
- Report to FTC at ReportFraud.ftc.gov or state AG.
- DIY basics: Contact creditors directly for hardship plans.
- Consult licensed attorneys for personalized help.
At Georgiou Law, PLLC, Efstathios Georgiou’s ex-banker expertise ensures scam-free, ethical debt resolution in NYC.
Spot a scam? Get real help: Call (917) 764-3072 or georgioulawpllc.com for free consultation.
