FTC Resources for Reporters
Debt Relief Service and Credit Repair Scams
Debt relief service scams target consumers with significant credit card debt by falsely promising to negotiate with their creditors to settle or otherwise reduce consumers' repayment obligations. These operations often charge cash-strapped consumers a large up-front fee, but then fail to help them settle or lower their debts – if they provide any service at all. Some debt relief scams even tout their services using automated "robocalls" to consumers on the Do-Not-Call List.
Auto loan modification scams falsely promise that they can reduce consumers' monthly car loan or lease payments to help them avoid repossession. The FTC also works to make sure consumers get a fair deal in the auto marketplace.
Credit repair scams also frequently target financially distressed consumers who are having credit problems. These operations lure consumers to purchase their services by falsely claiming that they will remove negative information from consumers' credit reports even if that information is accurate.
The FTC has brought scores of law enforcement actions against these bogus credit-related services, and the agency has partnered with the states to bring hundreds of additional lawsuits. Further, in 2010, the FTC amended its Telemarketing Sales Rule to protect consumers seeking debt relief services, like debt settlement or credit counseling. The Rule prohibits for-profit companies that sell these services over the telephone from charging a fee before they actually settle or reduce a consumer's debt. It also prohibits debt relief providers from making misrepresentations and requires that they disclose key information that consumers need in evaluating these services.
News Releases
- FTC Sends Refunds to Victims of Robocall Credit Card Interest Rate Reduction Scheme – 09/04/2012
- FTC Halts Two Operations That Deceived Consumers Looking for Help with Their Debts – 07/03/2012
- Court Halts Credit Repair Scammers in Response to FTC Contempt Charges – 06/07/2012
- Debt Relief Operation Settles with FTC for Allegedly Deceiving Consumers by Using Bogus and Unsupported Claims – 06/06/2012
- FTC Charges that Auto Loan Schemes Falsely Promised They Could Stop Consumers' Cars from Being Repossessed – 04/04/2012
- FTC Action Puts Robocallers Out of the Telemarketing Business – 03/28/2012
- FTC Action Leads to Contempt Ruling Against Marketers Who Tried to Take Advantage of Financially Strapped Consumers – 02/22/2012
- FTC Shuts Down Robocallers Who Claimed to Reduce Credit Card Interest Rates – 02/08/2012
- At FTC's Request, Court Freezes Assets of Telemarketing Operation that Allegedly Made Bogus Claims about Reducing Consumers' Interest Rates – 01/18/2012
- FTC Charges Telemarketers with Illegal Robocalling: Allegedly Violated the Do Not Call Registry, Disguised Caller ID – 12/19/2011
- FTC Sending Refunds to Victims of Debt Management Services Company That Violated Prior Court Order – 11/29/2011
- Court Finds Defendant in Contempt for Violating Prior Court Order That Prohibited Him from Making Credit Repair Pitches to Consumers – 10/20/2011
- FTC Charges Credit Repair Operators With Misleading Credit Bureaus and Charging Consumers Illegal Up-Front Fees – 10/13/2011
- At FTC's Request, Court Shuts Down Deceptive Mortgage and Debt Relief Operation – 10/4/2011
- FTC Asks Court To Halt Defendant from Impersonating Federal Agencies While Steering Consumers to Mortgage, Tax, and Debt Relief Services – 09/22/2011
- FTC Halts Mortgage Relief Schemes: Marketers Falsely Claimed to Be Affiliated with Federal Assistance Programs, Agency Alleges; Operators in One Case Required to Pay $1.8 Million – 08/25/2011
- FTC Permanently Halts Operation that Allegedly Made Bogus Claims about Eliminating Consumers' Debt – 08/23/2011
- FTC Settlements Put Debt Relief Operations Out of Business: Defendants Used Robocalls to Sell Bogus Plans to Lower Credit Card Interest Rates – 05/26/2011
- FTC Recovers Additional $2.1 Million for Consumers Defrauded by AmeriDebt Scam – 03/15/2011
- FTC Settlement Bans Marketers from Debt Relief Business: Defendants Must Pay $500,000 to Settle Charges – 01/20/2011
- FTC Action Puts Deceptive Marketer Out of the Debt Relief Business – 12/06/2010
- FTC Shuts Down Robocallers Who Falsely Promised to Lower Credit Card Interest Rates – 12/6/2010
- FTC Charges Marketers with Making Unsubstantiated Claims that They Could Eliminate Consumers' Debt – 12/02/2010
- FTC Obtains Court Order Barring Credit Repair Operation from Making False Claims and Charging Up-Front Fees – 10/28/2010
- Debt Relief Companies Prohibited From Collecting Advance Fees Under FTC Rule – 10/20/2010
- Victims of Bogus Debt Negotiation Scam to Receive Refund Payments – 09/28/2010
- FTC Obtains Court Order Requiring Credit Repair Operation To Stop False Claims; Family-Run Scam Surrenders Cars, Houses and Real Estate in Florida and South America – 09/01/2010
- Marketers of "Rapid Debt Reduction" Program To Pay $1.5 Million for Falsely Claiming They Could Lower Consumers' Interest Rates – 07/22/10
- Marketers Banned from Selling Credit Repair and Mortgage Relief Services; Ordered to Pay $7.5 Million – 04/22/2010
- Loan Pitchman Permanently Banned from Telemarketing – 03/26/2010
- Promoter of Credit Repair, Debt Relief Services to Settle FTC Charges – 03/18/2010
- Credit Repair Scammers Settle FTC Charges – 03/4/2010
- FTC Sues to Stop Robocalls With Deceptive Credit Card Interest-Rate Reduction Claims – 12/8/2009
- Two Bogus Credit Repair Operations Settle FTC Charges – 10/8/2009
- Operators of Credit Card Rate Reduction Scam Are Banned From Telemarketing – 07/9/2009
- 'Credit Repair' Operation Settles with FTC; Company Made False Claims and Charged Illegal Up-Front Fees – 06/25/2009
- Credit "Repair" Company Agrees to Settle FTC Charges; Company Made False Claims About Its Credit Repair Services – 12/23/2008
- Debt-Negotiation Defendants Agree to Settle FTC Charges in Nationwide Operation that Led Many Into Financial Ruin – 09/25/2008
- 'Debt Meltdown Program' Marketers Settle with FTC; Charged with Failing to Deliver Promised Debt Reduction Services – 08/5/2008
- FTC Charges Home Buying Consulting Business with Credit Repair Violations – 05/22/2008
- Debt Reduction Defendant Settles FTC Charges – 04/22/2008
- 'Debt Elimination' Defendants Settle FTC Charges – 05/23/2007
- Debt Management Telemarketers Settle FTC Charges: Defendants Will Pay Nearly $1 Million in Consumer Redress and Penalties – 06/15/2006
- Court Closes Book on Credit Repair Ripoff – 06/12/2006
- Debt Management Operation Settles FTC Charges: Companies, Individuals Will Pay More Than $2.4 Million in Consumer Redress – 05/3/2006
- Debt Services Operations Settle FTC Charges – 03/30/2005
- Remaining Jubilee Financial Services Defendants Banned from Providing Debt Negotiation Services – 01/26/2005
Reports & Workshops
Business Education
- Debt Relief Services & the Telemarketing Sales Rule
- Debt Relief Services and the TSR: What People Are Asking
- Credit and Finance
Consumer Information
- Ads for Auto Loan Modifications: You May Be Able to Drive a Better Deal with Your Lender
- Credit Repair: How to DIY and Avoid a Scam
- Money Matters: Dealing with Debt
- Knee Deep In Debt
- Building a Better Credit Report
- Free Annual Credit Reports
- Settling Your Credit Card Debts
- Before You File For Personal Bankruptcy: Information About Credit Counseling and Debtor Education
- Money Matters: Dealing With Debt
Congressional testimony
- Business Practices of Debt Relief Companies – August 12, 2010
- The Debt Settlement Industry: The Consumer’s Experience – April 22, 2010
- Credit Scores, Credit Reports and Their Impact on Consumers – March 24, 2010
- Financial Services and Products: The Role of the FTC in Protecting Consumers – Feb. 4, 2010
- How the FTC Works to Halt Fraudulent Schemes Exploiting the Economic Downturn and the Stimulus Package – Sept. 10, 2009
- The Consumer Credit and Debt Protection Act – May 12, 2009
- Consumer Credit and Debt: The Role of the FTC in Protecting the Public – March 24, 2009