Receiving calls from debt collectors can be so terrifying many people avoid even answering their phones if they know it’s from someone attempting to collect a debt. The majority of these calls are demanding payment, but there are times when debt collectors call to offer you something. Is this too good to be true?
Debt settlement offers are a common strategy used by debt collectors to get payment for a portion of the money owed to them or their client. Sometimes these offers are legitimate. Some debt collectors even allow debtors to make settlement offers and if the offer is good enough, debtors are able to settle their debt for a portion of the total they owe.
But what about unsolicited debt settlement? Should you accept an offer for a lump sum settlement made by a collector?
In many cases, unsolicited calls that come from companies offering settlements are nothing more than an attempt to “sniff out” how likely they are to get money from you – any amount of money. Calls are often pre-recorded and made via a robo-call system.
The idea of lowering interest rates on credit cards or reducing debt in some other manner might seem too good to resist, but chances are nothing positive will come of your accepting any unsolicited offers for debt settlement. In most cases, the person or company contacting you is pulling a bait-and-switch, and you are unlikely to benefit from anything to which you agree during the phone call.
Is this Legal?
There are laws against debt settlement solicitations set out by the Federal Trade Commission (FTC), but debt collectors and settlement providers tend to ignore them, with little repercussions. There are stories from consumers and attorneys about clients who received settlement offers with zero regard for FTC rules.
For instance, debtors were given no information about the negative aspects of debt settlement, nor were they given an estimate of the total cost of settlement services. Debt settlement programs typically charge a fee, and if someone contacting you denies there are fees or is not upfront about the amount of those fees, you are being scammed.
The specifics on the FTC and laws governing debt settlement are available here.
If you think settling a debt is the best option for you, your best bet is to work with an attorney. He or she will approach the debt collector and arrange a legal, reasonable settlement arrangement. You will know the cost of the settlement and any fees involved upfront and you will also understand the negative aspects of debt settlement – such as the effect on your credit and how it will affect you at tax time.
For more information on debt settlement or to speak to someone about what you can do to get your current financial situation under control, contact the Tampa Law Offices of Robert M. Geller at 813.254.5696 to discuss your situation.