skip to content
Primary navigation
Feature image for


Our mission is to protect the public interest, advocate for Minnesota consumers, ensure a strong, competitive and fair marketplace, strengthen the state’s economic future; and serve as a trusted public resource for consumers and businesses.

Trying to get out of debt? Beware of scams that don’t deliver on promises to help

8/13/2018 12:38:59 PM

For Immediate Release

SAINT PAUL – If you are struggling with debts and trying to get your finances in order, the Minnesota Commerce Department urges you to beware of debt settlement scammers who will take your money but never deliver on their promises of quick debt relief. 

Many reputable businesses and organizations help people get out and stay out of debt. But some companies target debt-burdened consumers with deceptive or false claims, illegal fees and bad advice that can push them even deeper into debt or legal trouble with creditors.

In Minnesota, anyone who offers to renegotiate or reduce your debt with creditors for a fee must be registered with the Commerce Department as a debt settlement provider. The department also licenses credit service organizations, which help consumers improve their credit, and debt management providers, which help consumers develop a budget plan to re-pay creditors. Consumers need to understand the differences among them because each offers different services and results.

Getting out of debt is no easy task, so the last thing you need is a company that will take advantage of your difficult financial situation and make it worse.

The Minnesota Commerce Department offers these tips to avoid falling victim to a debt relief scam:

  • Check the license. Make sure the company is registered in Minnesota by using the License Lookup tool on the Commerce Department website. If it is not licensed, contact the Commerce Department at or at 651-539-1600.
  • Never make upfront payments. Advance fees for debt settlement services are banned under both federal and state law. Minnesota law states that a debt settlement provider may not charge or collect any money until it has performed the services in the contract.
  • Read the fine print before you sign. Carefully review the written contract so you understand all fees and services. Make sure what you get in writing is the same as what you were told over the phone.
  • Know your rights. The contract must include a notice of your right to cancel it at any time with 10 days written notice. After cancellation, the debt settlement provider must stop collecting monthly fees and may also be required to immediately refund some fees.
  • Beware of unrealistic promises, such as erasing your debt for pennies on the dollar in a short time. Debt relief is an intensive process that requires a detailed analysis of an individual’s financial situation. If an offer sounds too good to be true, it probably is.
  • Beware of advice to stop paying your creditors. A debt settlement or debt management company cannot tell a consumer to stop paying their creditors. If they do, it is a red flag the company may not be trustworthy.
  • Consider other options. Nonprofit agencies with certified financial counselors can help consumers develop an action plan to improve their finances. Check with the National Foundation for Credit Counseling ( or the Financial Counseling Association of America ( to find local assistance.

 If you have a question about a debt relief offer or a possible scam, contact the Commerce Department’s Consumer Services Center by email at or by phone at 651-539-1600 or 800-657-3602 (Greater Minnesota).

Media Contact
Ross Corson
Director of Communications
Minnesota Department of Commerce
p: 651-539-1463 | c: 651-368-5050 |

back to top