How to Spot a Debt Relief Scam Before You Pay for Help

When debt feels overwhelming, an offer to make it vanish quickly can sound welcome. The Federal Trade Commission (FTC) warns that some companies take money with promises to get rid of debt and leave people worse off. Its March 2026 consumer alert gives a practical way to screen an offer before you share details or pay.

Start with the timing of payment. The FTC says an offer to collect money before settling any debts or enrolling you in a debt management plan is a scam warning. An organization may offer free or paid services, including budget counseling and debt management classes; a fee by itself is not the test. Ask what work will be done, when it will happen, and what it will cost before signing up.

Be wary of anyone who guarantees settlement of all your debts or fast loan forgiveness. The FTC also says an unexpected call or text offering fast settlement and asking for personal or financial information is a sure sign of a scam. Do not reply or share the information.

There are less rushed ways to look for help. Reputable credit counseling organizations should give you free information about their services before you explain your situation, review your finances thoroughly, and not charge in advance for help they have not yet provided. A local credit union, university, community college, or military personal financial manager may offer low-cost counseling; ask about charges first. Consumer.gov has do-it-yourself information about budgeting and debt.

If you spot a suspected debt relief scam, report it at ReportFraud.ftc.gov.

Source: FTC, "Looking for debt relief? Here's how to avoid a scam," March 26, 2026: https://consumer.ftc.gov/consumer-alerts/2026/03/looking-debt-relief-heres-how-avoid-scam