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Protect Yourself from Debt Consolidation Companies |
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The trend among American consumers of
acquiring makes the business of debt consolidation management an emerging industry. Over the last seven years, the United States economy has been quite turbulent. As the economy continues to boomerang, many patrons are feeling the aftershock of a previous time of financial depravity. Subsequently, credit counseling services, debt management plans and debt consolidation loans are inundated with clients to serve. By and large, for-profit and non-profit credit counseling agencies extend invaluable debt consolidation support. They act as a liaison between creditors and debtors. They also help consolidate unsecured debt and assist people to manage their finances better. In addition, they offer educational information. Debt consolidation services are also an alternative to filing for bankruptcy. As in any industry, there is corruption in the debt consolidation sector. With the escalation of American debt, a few illicit firms have been inspired to use consumers' misfortune to their fortunate advantage. The resulting new breed of non-profit credit counseling agencies is more focused on marketing debt consolidation and not in providing educational or charitable services to consumers. Therefore, there are an overwhelming number of grievances regarding non-profit debt consolidation agencies. Tens of thousands of consumers have filed complaints with the Better Business Bureau regarding the unethical and false representation of debt consolidation organizations. The government is looking into the problem via the IRS. It may conjure new audits and income for the country, but it may not impact predatory organizations for victimizing consumers entrenched in debt. Many Americans get cheated by the so-called debt consolidation companies, because they don't know clearly what the services that these companies should offer are. To be aware is to be prepared. Nonetheless, for there are some smart strategies to identify an illicit debt consolidation firm from an ethical one. Some, non-profit companies charges excessive fees, while others fail to offer free personal financial advice for a problem that can be solved by yourself. Some debt consolidation companies neglect to discuss or disclose consumer's legal rights. There are debt consolidation companies that require a payment before providing services. Some companies advise consumers to dispute all information contained in the credit report. There are debt consolidation companies that encourage the consumer to contact a credit reporting agency, directly or supports and encourages any illegal actions taken by the consumer to amend their credit, qualify as illicit. Essentially, whenever a professional agent, business consultant or financial counselor recommends any type of fraudulent activity, the consumer is liable for prosecution, as well. Some illicit companies advise the consumer to restructure a good credit rating by applying for an Employer Identification Number (EIN). If you seek help from a credit counseling agency or debt consolidation firm that recommends any of the above fast fixes for your credit rating, you must report the unethical recommendations to the Better Business Bureau. So, it is important to conduct a background research on debt consolidation firms before deciding on one. Check with your state's attorney generals office and the Better Business Bureau to see if the debt consolidation company that you intend to employ is legal. If the debt consolidation firm has a propensity for committing fraudulent business tactics, they will be listed on either the Better Business Bureau or the Attorney General's office. You can also find out whether the service extends workshops on budgeting and managing personal finances. This is one of the more prominent signs of an ethical credit and debt counseling/ debt consolidation program. You can see how the financial counseling agency is paid. Generally, when debt representatives are paid on a commission basis, they are motivated to improve their financial status as against their customers. Do not forget to present the same question to any non-profit debt consolidation organization as well. Also, inquire about the services hours. The credit and debt service should be open during normal business hours. Be wary of debt management firms that contact you via telemarketing. You should also ask to see a list of fees before finalizing a debt consolidation agreement. And remember to steer clear of any credit or debt management firms that carry exorbitant fees or abnormally high deposits requirements. As long as you apply the above tactics to find a debt consolidation company, chances are you will find a good one. |
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