Debt-Relief / Settlement Enrollment Scam
A 'debt-relief program' (sometimes posing as government) charges upfront fees and has you stop paying creditors, often leaving you worse off with fees and damaged credit.
Think a message like this reached you? You can check it right now.
What this scam is
You are pitched a program that promises to slash or erase your debts, sometimes claiming to be a special government relief effort. They charge upfront or large fees and instruct you to stop paying creditors and pay them instead into an account they control. Charging before settling debts is illegal for debt-relief companies, and stopping payments can wreck your credit and rack up penalties while the company keeps its fees. Some simply take the money and do little.
What it usually looks like
- Promises to erase or drastically cut your debt.
- Claims of a special government relief program.
- Upfront or large fees before results.
- Instructions to stop paying your creditors.
Common warning signs
- Fees charged before any debt is settled.
- Being told to stop paying creditors.
- Government-relief claims for private debt.
- Guarantees to eliminate debt.
Example wording scammers use
“New federal program erases up to 70% of your debt — enroll today, first payment covers our fee.”
“Stop paying your cards and send payments to us; we'll negotiate for you.”
These are illustrative examples written by ScamSplain, not real messages.
What the scammers want
- Upfront fees and control of your payments.
- To profit while your credit suffers.
- Your financial details.
What to do
- Be wary of upfront fees and 'stop paying creditors' advice.
- There is no blanket government program to erase private debt.
- Use nonprofit credit counseling for legitimate help.
- Verify companies with the CFPB and your state AG.
What to do if you already responded
- Contact your creditors directly to check your status.
- Dispute fees and report to the CFPB.
- Report at reportfraud.ftc.gov.