Debt Relief Scam Alert: How Unsolicited Calls Can Ensnare You in Debt Review

The National Automobile Dealers’ Association (NADA) is alerting South African citizens to an increasing fraud scheme featuring unexpected proposals for debt assistance.

The plans aim to secretly enroll people into an official debt assessment program, causing them to lose eligibility for upcoming car financing options.

How the scam works

“More South Africans are being contacted by organizations promoting debt assistance through unwanted calls. By completing a short questionnaire and responding with a ‘yes’ to several questions, customers might end up joining a debt review program without giving clear permission,” stated Brandon Cohen, Chairman of NADA.

Debt spiral

Debt counseling is crucial for individuals caught in a cycle of increasing debts. Deciding to seek structured guidance should not be made casually, and various alternatives should also be considered, like contacting lenders or consulting with a financial consultant.

Legal process

A formal procedure known as debt review helps individuals overwhelmed by excessive debts. This process includes a certified debt advisor, who charges fees for their assistance, evaluating the person’s financial status and working with lenders to create a more feasible payment schedule.

Cohen notes, ‘Once approved, the debt review scheme turns into a court ruling that the applicant has to follow until all debts are paid off.’

The debt assessment procedure is not an immediate solution and may take a long time, extending over multiple years, based on the financial responsibilities of the individual.

No credit

Throughout this time, someone undergoing debt review cannot access any additional credit. This creates a major issue for individuals who have been unintentionally registered, particularly when trying to secure car financing.

Having undergone debt review can significantly affect a person’s credit history and credit rating for an extended period.

Even once the procedure has been finalized, a debt review entry on an individual’s credit history may hinder their ability to obtain new credit with favorable terms.

Cohen urges customers to stay alert when interacting with representatives providing debt assistance solutions.

Refuse to agree to anything you haven’t thoroughly understood and hadn’t time to consider. Ensure that debt review is suitable for your situation by doing your own investigation and using only licensed debt advisors who have demonstrated success.

We also suggest utilizing call screening software to assist in preventing such unwanted calls that may result in falling into the debt review cycle.