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Debt-Relief Scams Steal From People Desperate for Financial Help
Criminals pretend to offer assistance from places like National Debt Relief, sinking victims deeper in the hole
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Key takeaways
- Debt-relief fraud is rising as financial strain grows, with loan assistance and debt relief topping robocall scam complaints in 2025.
- Criminals often impersonate well-known debt-relief companies, using convincing emails, logos and branding to appear legitimate.
- Warning signs include unsolicited offers, upfront fees, pressure to act quickly and promises to erase debt or repair credit fast.
Until the Federal Trade Commission (FTC) obtained a temporary restraining order in April, two businesses were making an attractive claim: They could help people eliminate their student loan debt.
The companies, New Education Relief and Edvantage Relief, cold-called people — even individuals on the national Do Not Call registry — and claimed to be affiliated with either the U.S. Department of Education or student loan companies. They typically charged an upfront monthly fee, sometimes as high as $1,400, and collected at least $8.8 million in revenue, according to the FTC.
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“I thought it was legit, and I paid over $3,000 until I found out the whole thing was a scam,” wrote one (of many) consumers who’ve complained about New Education Relief on the Better Business Bureau’s (BBB) website.
Debt-relief scams aren’t new, but “We’re seeing more of it, especially in the past two years," says BBB spokesperson Cinthya Lavin. "People are being solicited and told, ‘You qualify for a loan’ or ‘You qualify for debt relief.’ You see it even when you’re scrolling on social media. My husband is a veteran, and we often come across ads saying, ‘debt relief for veterans.’ ”
How the scam works
Someone claiming to be from a debt-relief company contacts you by phone or email and says they can help you manage your debts, whether it’s your credit card or your mortgage. They will make big promises, insisting that they can eliminate most, if not all, of your debt (and do so quickly).
The criminal may pressure you to move fast and charge you in advance for their “services.” Criminals may also impersonate legitimate companies, such as National Debt Relief.
The goal: To steal your money and your personal information.
Preying on financial insecurity
In 2025, loan assistance and debt relief — including auto, mortgage and student loan debt — topped the FTC’s list of robocall scam complaints. The agency issued a consumer alert about debt-relief scams in March 2026.
Total U.S. household debt is $18.8 trillion, the Federal Reserve Bank of New York declared in an August 2026 quarterly report. Americans have about $1.71 trillion in auto loan debts and around $1.2 trillion in credit card debt. Gen X carried the largest credit card balance, with an average balance of $9,560, according to the August report, and credit card payment delinquency rates are at their highest levels since the Great Recession.
Personal debt issues can create anxiety, worry and fear — states of mind that can make people more susceptible to fraud.
“Once you’re in that debt situation, and you’re in over your head, you become desperate,” says Cynthia Campos Delgado, founder of Campos Wealth Management in McAllen, Texas. “So you go with anybody offering relief.… You’re not in the right mindset.”
Impersonating National Debt Relief
One of the best-known debt-assistance companies is National Debt Relief (NDR), which specializes in debt settlement. Negotiators work with clients’ creditors to reduce the amount they owe on eligible unsecured debts, “helping many consumers resolve debt faster than they could on their own through minimum payments,” the company states.
Likely because its name is so widely known, NDR has seen “a huge increase in spam callers claiming to be us,” the company notes on its online Fraud Resource Center.
In April, a complainant on the BBB’s Scam Tracker site reported a phishing scam: Someone claiming to be from NDR asked for the person’s full name and phone number. “Now they won’t stop calling me,” the complaint said. In July, criminals sent an email to likely thousands of people, purportedly from an NDR partner. In some ways, it was an obvious scam: It used a nonsensical email address (a string of consonants and numbers, and no clear relation to the company) and a subject heading with serious spacing issues (“Subject: Let’s Tak e Thi s O ne Ste p a t a Tim e”).
The message itself, however, looked professional. It featured the NDR logo. It included logos for the company’s A+ rating from the BBB, a best-of-2026 ranking from Forbes, logos from Trustpilot and the Association for Consumer Debt Relief, and a link to request a free consultation.
NDR is aware of the impostors and encourages consumers to report fraudulent calls or emails to the company.
“We can’t control what these scammers are doing,” the company said in a statement to AARP. “But we only know about them if people are reporting them.”
How to avoid debt-relief scams
Ignore unsolicited messages. “If a debt-relief company calls you or emails you first, that’s a red flag,” says Timi Joy Jorgensen, a personal finance expert with NDR and assistant professor and director, financial literacy, at the American College of Financial Services. “That would be like a car dealership calling you to sell you a car.”
Watch for targeted pitches. Scammers can buy credit reports and see what people owe. That allows them to personalize their messages. “They can come to you with figures saying, ‘I know you owe this much. We can help you,’ ” Lavin says.
Recognize overpromises. “They might say, ‘We can solve all your problems. We can fix your credit report,’ ” Jorgensen says. “Anything that claims you can get out of debt today, totally repair your credit, live debt-free without having to change your lifestyle — that’s not how it works. There is a whole pathway to navigate to get debt-free, and it requires work on the part of the consumer and the company.”
Never pay upfront fees. Debt relief companies cannot legally charge you a fee before they settle the debt and make a payment to the creditor. “This is a very regulated industry,” Jorgensen says. “If [a company] is asking for an upfront fee, they’re not reputable.” Also watch for unusual payment requests — another hallmark of scams — such as cryptocurrency or gift cards. “No legitimate company is going to ask you to pay them via gift card,” says Lavin.
Beware of pressure tactics. Criminals want you to move quickly because speed and tension usually lead to bad decisions. “If they say you can only do it today, or you only qualify today — if we hang up, this offer will no longer be available to you — that’s a pressure tactic,” Lavin says. Adds Jorgensen: “When you’re working with a legitimate debt relief company, they are going to slow down, explain the process to you, send you a contract, send you information and answer all your questions. If you feel like they are rushing you to come to a decision, that’s a huge red flag.”
Find legitimate assistance. The nonprofit National Foundation for Credit Counseling (nfcc.org or 833-746-7578) offers free consultations with NFCC-certified credit counselors. You can also research debt-relief companies (make sure they’re accredited; the BBB has a list) via review sites such as ConsumerAffairs or Trustpilot.
Report scams. If you’re approached in a debt-relief scam, file complaints with the BBB, the FBI’s Internet Crime Complaint Center (IC3.gov).
You can also receive free advice and support by calling the AARP Fraud Watch Network Helpline (877-908-3360).
The key takeaways were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.
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