Consumer Debt Initiative – What is it?

There have been a number of companies soliciting people by sending them letters titled the ‘consumer debt initiative’ or something like that. These letters appear to be from government agencies, but closer examination of them will reveal that the sender of the letter is not, in fact, a government agency.

The letters also use a lot of buzzwords like ‘quick tax refunds’ and ‘consumer debt relief’, and that these debt relief strategies are part of a government debt relief initiative for consumers. The letters may also reference companies such as Fanni Mae and Freddie Mac or other mortgage lenders.

So the question arises, is it a scam of some kind?

The truth is that there is no consumer debt initiative set up by the government to reduce consumer debt. The closest program established by the government is the American People Recovery Rebate and Economic Stimulus Act of 2008.

Unsolicited letters are nothing more than attempts to lure people into debt relief programs or worse, they are a form of debt collection under a false pretense. Under no circumstances should you respond to this form of advertising.

Let’s deconstruct the phrase consumer debt initiative. They are simply initiatives that can be applied by or for consumers who need debt relief.

Such initiatives can be, for example:

• Establish a monthly budget; something you can do yourself or someone else.

• Debt settlement, debt counseling, debt consolidation; generally best handled by professionals

• Bankruptcy; clearly the most extreme initiative and should be handled by professionals.

All of these consumer debt initiatives depend on the consumer taking the initiative to look at their financial situation and decide if anything needs to be done. If the consumer forms the opinion that their financial situation is not what it could be, or is in fact suffering, then the next step should be to contact a professional for further assistance.

At first glance, the consumer debt initiative is not a scam. However, the strategy has been used by unscrupulous companies for dubious reasons and can therefore reasonably be argued as a scam. To avoid getting caught by the trap, as mentioned above, one should not reply to any spam.