Video on 'American Debt Relief' program misleads

Debt among American households reached a record high at the end of 2022. And promises to get it relieved are tempting.

A Facebook post claims to show a family receiving news that their own debt had been cleared through a debt relief program for American citizens or legal residents who "have over $20,000 in (credit card) debt."

Footage shows the family screaming with joy after appearing to view an email that says its $31,844 credit card balance has been resolved and that "no further payments are due." The sender of the email signs as "Finance Help USA."  

This post was flagged as part of Meta’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Meta, which owns Facebook and Instagram.)

First, the family in the video is not screaming over debt relief. That scene appears to be clipped from a 2019 TikTok video showing a prospective Tulane University student receiving news of her acceptance. It is set against a split screen showing video of the supposed debt-relief email. Her video went viral and became a meme.

Second, the post refers to something called the "American Debt Relief" program, which sounds like a federal government program, but isn’t. The Federal Trade Commission  recommends consumers who see these kinds of pitches check whether the associated website ends in ".gov," which signifies that it is legitimately a federal government program, an agency spokesperson said. In this case, it doesn’t.

Nick Hillman, University of Wisconsin-Madison education professor who studies the effect of finance, policy and geography on educational opportunities in the U.S., said that "the word ‘relief’ can be really confusing and misleading because I imagine most people would think ‘relief’ is the same thing as ‘cancellation.’"

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The Facebook post includes a link to this page from a private company called Freedom Debt Relief. Debt settlement companies such as this one, help resolve debt to avoid bankruptcy, by negotiating agreements with creditors to pay less than the full balance. In exchange, customers pay a fee for the service. 

These companies normally negotiate unsecured debts such as student loans or credit card debt, but not loans that have collateral, such as auto loans and mortgages.

Hillman said, "The refinancing process may provide ‘relief’ by offering borrowers lower interest rates or possibly other benefits, but these also come at a risk." For example, if a borrower refinanced a federal student loan to a private company such as SoFi, that borrower would lose all the benefits that come with holding a federal loan.

The Facebook post saysr the minimum debt to apply for the program is $20,000, but the company accepts people with debts starting at $7,500. 

The Freedom Debt Relief website includes a disclaimer that says, "We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services."

A Facebook video claims to show a family receiving word their debt has been resolved through the "American Debt Relief Program," which purportedly aids American citizens and legal residents who "have over $20,000" in credit card debt."

But this video was clipped from a TikTok video that showed a family responding to news of a college acceptance. We found no federal program called the American Debt Relief Program. The post leads to a debt settlement company that does not wipe out debt but, for a fee, negotiates with creditors to let borrowers pay less than they owe.

We rate this claim False.