CLEVELAND, Ohio — In its list of the top scams of 2024, the BBB of Greater Cleveland reported debt collection scams are among the top ten.
It's one that's expected to continue as consumers feel more financial stress.
Ohioans are easy targets of these scammers offering bogus debt relief because a quarter of credit card accounts in our state were past due by at least 30 days at the end of last year according to WalletHub.
Its analysis also found Ohio saw the 10th largest increase in delinquent cards nationwide.
For Darryl France, he was only able to pay the minimum due each month. He watched his balance basically stay stagnant because of interest.
"Just seeing how it was compounding and the time that it would take with me paying the minimum to pay it off, just kind of started to get stressful," said France.
Many Ohioans are currently feeling that stress, and for some it's crippling, as they try to keep up with their payments.
"Folks tend to feel shame and guilt and embarrassment around their finances," said Rachel Durci, Effortless Budgeting.
As a financial planner, Durci has a front row seat to the emotional toll debt takes on Northeast Ohioans and how it leaves them vulnerable.
"There are a lot of scams out there involved with it, and they can be really convincing," said Durci.
In fact, debt relief was among the top ten scams reported to the BBB in 2024.
"There are a lot of people out there struggling with finances and wanting an easy fix," said Durci.
Scammers falsely claim they can negotiate with creditors to reduce repayment obligations.
"Oftentimes the best choice is not consolidation, or is not bankruptcy, or is not credit repair,” said Durci.
Cash strapped consumers are promised help settling or lowering their debts after paying a large upfront fee using crypto, gift cards, or peer-to-peer money transfer apps like PayPal and Venmo.
"These are all scammers' best friends because it's a good way for scammers to get the money anonymously and then consumers are left holding the bag," said Ryan Lippe, Consumer Educator of the Ohio Attorney General’s Office.
Debt collection scammers hope you pay them quickly, without asking any questions.
Here are a few you should ask:
- The name of the person calling and company they work for.
- The debt collector's license number.
- The amount of debt.
- The name and address of the creditor who is trying to collect from you.
Also, don't crack under the pressure of scare tactics.
"They want you to act fast, they want you to think flatfooted, they don't want you thinking with a rationale mind,” said Lippe.
Look out for these red flags:
- You don't recognize the debt.
- The collector won't identify themselves.
- You're offered a deal that seems too good to be true.
"If you have $30,000, $40,000, $50,000 in debt, it's not just going to go away tomorrow. It does take time," said Durci.
If you're facing mounting credit card debt, and you’re struggling to make payments, Durci suggests contacting a financial planner.
Set a goal to not only pay down your debt but also take the time to learn more about the behaviors that got you into financial trouble in the first place, so you can make sure history doesn't repeat itself.
