Have you recently gotten a phone call or a message on your voicemail from a company claiming they can negotiate “significantly” lower interest rates on your credit cards? If you are someone who is deep in credit card debt, you may view this as a voice from heaven. It’s not from heaven. Voice mail boxes across this country are loaded with prerecorded phone calls from companies that claim to be able to negotiate lower interest rates with your credit card issuers, and you can also expect to have your identity stolen in the bargain.
Like anything else that seems too good to be true, consumers who get these interest rate reduction calls should delete them. Most of them are scams. The companies claim they have a “special relationship” with credit card companies and banks. They “guarantee” that their arrangements with your creditors will save you thousands in interest and finance charges and will let you pay off your credit card debt five times faster than you can otherwise be able to do. They claim that the lower interest rates are only available for a limited time and you need to act now. Some even use money back guarantees to get you hooked.
If you do get such a call, and really need help, any reputable financial advisor will tell you, and the Federal Trade Commission has agreed, the companies making these claims can’t do anything for you that you can’t do for yourself — for free. Because of many complaints by duped debtors, the FTC investigated and found that people who paid for these services didn’t get what they paid for. They did not get the rate reductions, they didn’t save any money and they weren’t able to pay off their credit cards any faster than before. Unfortunately they weren’t able to easily obtain refunds from these companies.
The Federal Trade Commission is certainly aware of this type of scam. They amended their Telemarketing Sales Rules to prohibit companies selling such services from charging a fee before they settle or reduce your debt. If you do decide to hire a debt relief company, or a debt settlement company, you may be required to put money in a dedicated bank account, which will be administered by an independent third party. You may be charged a reasonable fee, and the third party will be transferring your money from your account to pay your creditors.
As for the purported interest rate reductions, the FTC says that your best bet is to handle it yourself. Call the customer service phone number on the back of your credit card and ask for a reduced rate. You will probably be transferred to a supervisor, but be persistent; you won’t get anything if you don’t ask. DO NOT be tempted by the so-called rate reduction phone call. And, most importantly, keep the following in mind:
- Never give any telemarketer your credit card information. Once they have your number, they can charge your credit card for their own purchases or sell the information to other scammers.
- Don’t give out any other personal financial information like your bank account or Social Security numbers. The scammers ask for this information and it’s easy to be caught off-guard. They will use this information to commit fraud against you.
- If you are ON the National Do Not Call Registry, you shouldn’t be getting any sales pitches. To report violations of the Registry or to register your number, visit www.donotcall.gov, or call 1-888-382-1222.
If your credit card has been charged for a service you didn’t order, authorize or receive, and you can’t get a refund, file a dispute for the transaction with your credit card company. Try to stop the payment first by calling and follow up in writing. Under the Fair Credit Billing Act, you have the right to dispute charges for any service you didn’t get or any transaction you didn’t authorize. Prevention is the best cure; don’t become a victim.
- 7 May, 2012
- The Bill Coach
- 0 Comments
- Credit Card Debt, credit card pitfalls, Credit card scams, Credit Scams, Identity Theft, Interest Rate Reduction scams,