First Advantage Debt Relief, What It Is, How It Works, and What You Must Know
First Advantage Debt Relief is a lead generation service that collects your information and shares it with third-party debt settlement companies—it doesn’t actually provide debt relief services itself. This matters because you’ll be contacted by multiple companies after submitting your details, and federal law strictly regulates how actual debt relief services operate.
According to consumer reviews, approximately 43% of Americans carry credit card debt, creating a lucrative market for debt relief services. Understanding what you’re really signing up for protects you from scams and unwanted solicitation.
How Debt Relief Services Actually Work
The Lead Generation Model
When you submit your information to First Advantage, you’re not enrolling in a debt relief program. Instead, the company acts as a middleman that passes your contact details to partner companies like National Debt Relief, Freedom Debt Relief, and others who pay referral fees.
These partner companies then contact you to pitch debt settlement, consolidation, or other programs. This isn’t illegal, but many people feel misled when they receive multiple calls from companies they didn’t directly contact.
How Real Debt Settlement Works
Actual debt settlement programs typically work like this: You stop paying your creditors and instead deposit money into a dedicated savings account. The debt relief company then negotiates with your creditors to settle your debts for less than you owe—often 40-60% of the original balance.
Under the FTC’s Telemarketing Sales Rule (16 CFR Part 310.4(a)(5)), debt relief companies cannot charge fees until they successfully settle at least one debt, you agree to the settlement in writing, and you make at least one payment under that agreement. This advance fee ban protects consumers from paying for services never delivered.
What You Need to Know About Federal Protections
The Fair Debt Collection Practices Act prohibits debt collectors from using harassment, false statements, or unfair practices when collecting debts. If creditors pursue collection during your debt settlement program, you have legal rights.
Your credit score will typically drop significantly during debt settlement because you stop making payments. Settled accounts appear on your credit report and damage your creditworthiness for up to seven years.
Common Scenarios With Debt Relief Services
When You Submit Information Online
When someone fills out a form on First Advantage’s website expecting personalized debt help, they’re actually authorizing the company to share their financial information with multiple third parties. Many consumers report being bombarded with calls from unknown companies right after submitting their information.
This practice isn’t unique to First Advantage—many “debt relief” websites operate the same way. The key difference is transparency about what actually happens with your data.
If You Enroll in Actual Debt Settlement
When you enroll with a real debt settlement company (one of the partners First Advantage refers you to), you’ll typically stop paying creditors and deposit funds into a dedicated account. Under 16 CFR Part 310.4(a)(5)(ii), this account must meet specific requirements: it must be held at an insured financial institution, you must own the funds and receive any interest, and the account administrator cannot be affiliated with the debt relief company.
During the months or years it takes to accumulate enough to make settlement offers, your credit score drops, late fees accumulate, and creditors may sue you for the unpaid debt. These are real risks that many consumers don’t fully understand when enrolling.
Warning Signs of Debt Relief Scams
Under FTC rules, companies that charge upfront fees before settling any debts violate federal law. If a debt relief company demands payment before delivering results, report them to the FTC—it’s illegal to front-load fees.
Other red flags include guarantees of specific debt reduction percentages, pressure to enroll immediately, and claims that debt settlement won’t affect your credit score.
What People Get Wrong About Debt Relief
“All Debt Relief Companies Are Scams”
Not true. Legitimate debt settlement companies exist and operate under strict FTC regulations. The problem is distinguishing between legitimate providers and fraudulent operations or misleading lead generators like First Advantage.
Nonprofit credit counseling agencies accredited by the National Foundation for Credit Counseling or Financial Counseling Association of America offer legitimate alternatives. These organizations provide debt management plans and financial counseling, often at low or no cost.
“Debt Settlement Won’t Hurt My Credit”
False. Debt settlement severely damages your credit score. When you stop making payments as instructed by settlement programs, accounts become delinquent, charge-offs appear on your report, and your score drops—sometimes by 100+ points.
Settled debts remain on your credit report for seven years from the date of first delinquency. This affects your ability to get loans, credit cards, housing, and sometimes employment.
“I Need a Company to Settle My Debt”
You can negotiate directly with creditors yourself without paying fees to a debt settlement company. Many creditors prefer direct negotiation and may offer similar or better settlement terms without a middleman involved.
The advantage of DIY settlement: you save the 15-25% fees that companies charge and avoid monthly program fees. The disadvantage: you need to handle negotiations and strategy yourself.
If You’re Considering Debt Relief Services
Verify Legitimacy First
Before enrolling with any debt relief company, check their licensing with your state attorney general’s office. Many states require debt relief companies to be licensed and bonded.
Search the Better Business Bureau and Consumer Financial Protection Bureau complaint databases for the company name. Look for patterns of complaints about advance fees, broken promises, or aggressive sales tactics.
Never pay upfront fees before a company settles at least one debt—this violates FTC rules under 16 CFR Part 310.4(a)(5).
Consider Alternatives
Nonprofit credit counseling: Organizations accredited by NFCC or FCAA offer debt management plans that consolidate payments without settlement. Your credit score isn’t damaged as severely because you continue making payments.
DIY debt negotiation: Contact creditors directly to negotiate payment plans or settlements. Many creditors have hardship programs you can access without a third party.
Bankruptcy consultation: If your debt is overwhelming, bankruptcy or find assets after probate may provide better protection and a faster fresh start than years in a debt settlement program. Consult a bankruptcy attorney to understand your options.
Understand the Tax Implications
Forgiven debt over $600 is generally taxable income. If a creditor settles a $10,000 debt for $4,000, you may owe income tax on the $6,000 forgiven amount. The creditor will send you IRS Form 1099-C reporting the cancellation of debt.
This can create a significant tax bill at the end of the year—something many debt settlement companies fail to adequately explain.
Frequently Asked Questions
What is First Advantage debt relief?
First Advantage Debt Relief is a lead generation service, not a debt relief provider. It collects consumer information and sells it to actual debt settlement companies for referral fees. You’ll be contacted by multiple third-party companies after submitting your information.
Can debt relief companies charge upfront fees?
No. Under the FTC Telemarketing Sales Rule (16 CFR Part 310.4(a)(5)), debt relief companies cannot charge fees until they settle at least one debt, you agree to the settlement in writing, and make at least one payment under that agreement. Advance fees are illegal.
How does debt settlement affect your credit score?
Debt settlement typically causes significant credit score damage. Stopping payments creates delinquencies and charge-offs that remain on your credit report for seven years. Your score may drop 100+ points, affecting your ability to get credit, housing, and sometimes employment.
What’s the difference between debt relief and bankruptcy?
Debt relief (settlement) means negotiating to pay less than you owe while trying to avoid bankruptcy. Bankruptcy is a legal process that discharges or restructures debt under court protection. Bankruptcy provides immediate relief from collection and lawsuits, while debt settlement takes months or years and offers no legal protection during the process.
How do I know if a debt relief company is trustworthy?
Verify state licensing through your attorney general’s office, check BBB and CFPB complaint databases, ensure they don’t charge advance fees, get all terms in writing, and confirm they clearly explain risks including credit damage and tax implications. Be wary of guarantees or high-pressure sales tactics.
Are there legitimate alternatives to debt settlement companies?
Yes. Nonprofit credit counseling agencies accredited by NFCC or FCAA offer debt management plans at low or no cost. You can also negotiate directly with creditors yourself, explore hardship programs, or consult a bankruptcy attorney to understand all your options before enrolling in any program.
Last Updated: January 25, 2026
Disclaimer: This article provides general information about debt relief services and consumer protection laws, not financial or legal advice for individual situations.
Need help understanding your debt relief options? Visit the FTC website at ftc.gov, contact your state attorney general’s consumer protection division, consult a nonprofit credit counselor, or speak with a consumer protection attorney about your specific situation.
Stay informed, stay protected. — AllAboutLawyer.com
Sources Cited:
- 16 CFR Part 310 (FTC Telemarketing Sales Rule)
- 16 CFR Part 310.4(a)(5) (Advance Fee Ban for Debt Relief Services)
- Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.)
- Consumer Financial Protection Bureau Debt Relief Guidance
- National Foundation for Credit Counseling Resources
- Financial Counseling Association of America Standards
- IRS Form 1099-C (Cancellation of Debt)
About the Author
Sarah Klein, JD, is a former consumer rights attorney who spent years helping clients with issues like unfair billing, product disputes, and debt collection practices. At All About Lawyer, she simplifies consumer protection laws so readers can defend their rights and resolve problems with confidence.
Read more about Sarah