Episode introduction
Steve Rhode: Back with the Get Out of Debt Guy, I’m Steve Rhode, the old, authentic Get Out of Debt Guy. And you know, if you’re in debt and have a phone, you probably recognize this particular problem, because every time you open TikTok, Instagram or Facebook, there’s another secret program.
Damon day: Hey, what’s going on, everyone? You know, there always seems to be some other government-backed utility, or someone in a rented Lamborghini telling you he’s found a loophole that the banks don’t want you to know about.
Steve Rhode: Today we’re going to pull back the curtain on the hidden debt relief pitfalls you’re seeing right now. And we’re going to tell you how easy it is to manipulate you into ruining your future for someone else’s gain. We’re going to talk about TV ads, radio spots, the perfect TikTok ad, and the “click here to get rid of 80% of your debt” ads you see and why they’re following you around the internet.
The emotional buttons that scammers push
Steve Rhode: There are a few reasons why debt relief marketing, whether on YouTube or another platform, is so insidious: because it works. There are certain emotional buttons that can be pushed to make you respond. During my life in debt relief, we originally started with print ads about President Bush’s “amazing debt relief program.” And then we went into the digital area and then it became the Obama program, then the Trump program, and then the Biden program. And now Trump has a new program. He’s back.
Shame-based messages
Steve Rhode: One of the top ten ways to manipulate you into relieving debt is shame-based messaging. Let me know if this sounds familiar: “You signed up for it. You have a moral obligation to pay every cent, no matter how long it takes. Real adults don’t go bankrupt. They work harder.”
Damon day: It sounds familiar. You could be hired.
Steve Rhode: So here’s why it sells. Shame keeps people from exploring legal, rational options like bankruptcy that could actually free up their lives and retirement. And if a guru can leave you hanging in shame, he can sell you years of systems, budgets and coaching instead of one decisive solution.
Damon day: And it’s not just Dave Ramsey. It’s the banks; the whole system uses shame and creditworthiness just to keep you toiling. All debt relief programs use it. “Oh, you don’t want to file for bankruptcy. That’ll ruin your credit for ten years.” Everything is designed to keep you from looking at another option that isn’t what the person on the phone, on the TV, or the TikTok video is selling.
Fear and threat marketing
Steve Rhode: Another emotional hot button that causes people to make bad decisions is fear and threat. You’re in debt and you feel lost, alone, scared, confused, ashamed, depressed – that’s not the time to learn how to reinvent the wheel. It’s normal for people to say, “Hey, I want this pain to go away.” The pitch sounds like: “If you don’t act today, your wages could be garnished. Legal action could be taken against you. Your file will be reviewed for escalation.”
Damon day: Lately I’ve had a few clients where things went straight from the pan into the fire. They get into one program, it doesn’t work, so they cancel and get into another program. The common theme was that they were just stressed about the debt. These salespeople will answer the phone and tell you exactly what you want to hear. Lots of promises, few details. They never focus on what your other options are; you just need to sign the contract right away.
The relief fantasy
Steve Rhode: “You can eliminate 75 to 85% of your debt if you sign up today with one simple phone call.” But people listen to what the promised relief is, not to what the facts are, not to how many people actually get that relief. If a company tells you to pay $800 a month and you say you can’t afford it, suddenly they can do it for $700. It’s all negotiable because it’s made up.
Damon day: People have no frame of reference. They’re bombarded with all these messages and it’s all going to the same place. Most of these ads promise to reduce your debt; they are all debt settlement companies. You start calling and notice the common theme, and you just assume it’s all legit because they all promise the same thing.
Fake consolidation loans
Damon day: Maybe you’ve applied for multiple consolidation loans and been rejected. Then suddenly your phone is full of voicemails about this great consolidation loan: “You only have three days, you have to call back.” These are just debt settlement companies. They offer a fake consolidation loan that does not exist. You call them up, they take your information, go out for a cigarette, come back and say, “I’m sorry, you don’t qualify for the consolidation loan, but I have a better program for you.” Bait and switch.
Steve Rhode: They know you want this fantasy consolidation loan where some benevolent billionaire is going to give you $50,000 at 5%. It doesn’t exist. But it makes you call.
Magic beanstalk letters
Damon day: The phrase “Magic Beanstalk Letters” comes from these debt validation companies. Their pitch is that they will send special letters to the banks pointing out various statutes and that the banks will tremble at the mere thought of these letters and the debts will magically disappear. My favorite part about this scam is that they typically charge 30 to 50% of your actual debt. If you have $100,000 in debt, they will try to charge you $30,000 to $50,000 for the promise that all your debt will be wiped away.
Steve Rhode: But you will still have to pay them 30 to 50% of it. If you had that money, why not just negotiate with the banks where you know it will actually be gone?
Damon day: What’s actually going to happen is you’re probably going to pay these guys between $8,000 and $10,000 of that fee. Then you get lawsuits that the Magic Beanstalk Letters did not prevent. And you no longer have any money to negotiate with the creditors about anything, because the Magic Beanstalk guy took all your money.
Why salespeople can lie
Steve Rhode: There is a very important twist that many people don’t understand. The seller may lie to you. Because at the time you sign the client agreement, it states that none of the oral statements made prior to signing apply. This agreement is binding in everything.
Damon day: And no one reads it. It’s about 25 pages. They come out with a stack of papers and it’s turned over here, signature there, initials here. That’s kind of how they do it.
The 10 second intestinal check
Steve Rhode: Before you click, sign or provide information: If they promise a specific percentage of debt reduction before they see your bills: hang up. If they rely on government logos or buzzwords instead of explaining their program, don’t waste your time. If it’s ‘trade today only’, run. If they won’t give you the written customer agreement: execute.
Damon day: Many of them will give you the contract. And then you get what I call the “turd nuggets”: there’s a lot of turd nuggets in that contract. But especially those who don’t want to give it to you, then there is definitely a problem. Call me, send it to me. We will go through it. I’ll show you all the turd nuggets.
Final advice
Damon day: I don’t want to say 100%, but I guess I would have to say that 100% of all the ads you see promising debt relief are going to lead you to something that is probably not a good strategy for your situation. Call all these companies, gather all the information you want, but don’t act on it until you are 100% sure you know what you are getting into. I’m just a phone call away from DamonDay.com. You’re on the phone with me and maybe you come away thinking, “I’m glad Damon pointed out all those turd nuggets that I didn’t see in the fine print.”
Steve Rhode: And the funny thing is, over the years we’ve had insiders write to us and say, “Oh my God, you don’t even know the worst of it.” People who worked at debt settlement companies eventually left because they couldn’t sleep at night.
Damon day: Most of these salespeople are good people. They just get hired, go through training and really feel like they’re helping, because they don’t know what’s happening behind the scenes. But ignorance about fire is still dangerous. The entire debt relief industry tries to shoehorn your problem into their makeshift program instead of designing a strategy specifically for you.
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