Government-Run Debt Consolidation Programs Don’t Exist |

If you see an Internet ad promising you an Obama free debt consolidation program, don’t click. The odds are great that a traditional debt settlement or consolidation company is behind the ad. That’s because the Obama administration, despite what you may see in pop-up ads, does not offer any government-sponsored debt consolidation programs. In other words, while the Obama administration does offer bailouts to banks, mortgage lenders, insurance companies and homeowners facing foreclosure, it doesn’t provide any similar programs for consumers struggling to get a handle on their credit card debt.

Beware Misleading Ads

Financial columnist Steve Bucci, who serves as the Debt Advisor writer for financial site,, recently addressed this issue. He made it perfectly clear: There is no such thing as an Obama-sponsored credit card relief program. This means that consumers who want to consolidate credit card debt have to do so on their own, without any help from federal agencies. There are plenty of companies out there that do offer debt consolidation counseling, debt settlement and debt consolidation services. But consumers who take advantage of these programs to reduce or settle their debt will have to pay for the services out of their own pockets. All those annoying Internet ads, then, showing dancing silhouettes or jogging women are more or less lying to consumers.

Don’t Click!

Consumers who click on these online ads that promise Obama credit card relief or Obama debt consolidation programs will undoubtedly be taken to the home page of a for-profit debt consolidation or settlement company. If consumers contact these companies, by phone or e-mail, they’ll receive a standard pitch: The company will promise to either settle or consolidate their debt for a fee. It’s the fees that consumers have to watch out for. Settling or consolidating credit card debt is beneficial. Consumers just have to do their research to make sure that they’re not spending too much to do so.


Companies that offer to consolidate debt or settle it are performing an important service. They shouldn’t, though, resort to misleading advertising tactics, something that they do far too often. The debt reduction business is a competitive one, so the companies working in it aren’t averse to making misleading claims if it means more business. Consumers, then, should make sure that they know they are signing up with a for-profit, private business, and that they’re not working with the federal government. They should also make sure they understand exactly what fees and interest rates debt consolidation or settlement firms are charging them before they sign any contracts.