Promises to Legally Eliminate or Cancel Debt May Be a Scam
The Claim: Eliminate Your Debts
You may see an ad when searching google, or get an e-mail saying “Eliminate credit card debt totally — canceled, terminated — legally!” The companies behind these ads promise they’ll help you fight the legality of your credit card debt for a fee, which they’ll charge to your credit card, and then contest the legality of that debt too.
You tell yourself it’s too good to be true and it’s a scam, but you think it can’t hurt to check it out. Wrong.The companies behind these debt elimination scams cite a legal basis for how consumers can legally eliminate or cancel their debt. They cite Title 15 United States Code, Section 1692; the Fair Debt Collections Practices Act, Section 1601; the Fair Credit Billing Act; and the Uniform Commercial Code, Section 203. But the ads never say exactly what it is about those laws that render credit card debt illegal, and there is nothing in any of those laws that render credit card debt illegal. Their ads might say that banks are not really lending you their own money or didn’t disclose certain details to you when you applied for the credit card, therefore the credit card company’s contract with you isn’t legal; Neither claim is true.
The Scam: Force Your Lender to Eliminate Your Debt
For a fee, companies promising to eliminate your debt promise to show you how to force your credit card company into legal arbitration so you can get your debt fully discharged. If you decide not to pay your credit card debt, you might, indeed, end up in court or in binding arbitration since your credit card agreement probably includes a mandatory arbitration clause, but your chances of winning are almost nil. You could end up owing every cent of your credit card debt, plus interest, plus the fees paid to the debt elimination company, AND legal fees and court costs associated with forcing the issue into court or arbitration.Also beware of companies who claim that you can send your credit card company a legal-sounding document such as a “Bond for Discharge of Debt” of “Bill of Exchange,” along with a minimum debt payment. These companies may say that when your credit-card company accepts one of these documents and cashes your check, they’ve agreed to eliminate your debt; this is also not true.
If you borrowed money, either via a conventional loan or via a credit card, you’re responsible for repaying the money. Watch out for companies who promise to “totally eliminate debt” or argue that “credit card debt (or your loan) is illegal.”Never, ever respond to spam or other unsolicited ads related to your debt. Legitimate debt management companies don’t need to advertise this way, and the companies that do advertise this way are likely to take your money and leave you deeper in debt.