Debt Relief Companies
5 ways to tell that the relief program you’re exploring isn’t legit
Facing challenges with debt is stressful enough. From past due notices to collection calls, being in debt brings constant stress. The last thing you need is to add to your stressed by getting scammed. Unfortunately, there are companies out there bent on taking advantage of consumers who are already in a bad situation. They know you’re desperate and willing to do anything to get out of debt, so they use that sense of urgency against you to get money without actually doing anything to fix your situation.
So while debt definitely sucks, getting scammed by a disreputable debt relief company definitely makes it suck worse. The information below is designed to help you avoid getting scammed by a disreputable “service provider.” We identify the four main ways you can spot a scam, so you can find a real debt relief service provider so you can start getting real relief as soon as possible.
And remember – if you need legitimate help to find debt relief, we can help. Consolidated Credit is an A+ rated company with the BBB, we’ve been in business over 20 years and helped over 5 million people get out of debt. Even if you’re struggling with more than just credit card debt, we may be able to direct you to reputable providers of other services after a credit counsellor assesses your situation. Call us today at 1-844-402-3073 for a free consultation.
Sign of a scam No. 1: To-good-to-be-true claims
“We guarantee we can settle your debt for just pennies on the dollar.”
Ever heard that claim on a commercial on either late night or daytime local television? How can they guarantee something about your debt if they’ve never even talked to you?
The unfortunate truth is that claims that seem to be too good to be true usually are just that. Words like “guarantee” are usually a dead giveaway of a scam unless there is an actual guarantee that they offer – like a 60-day money-back guarantee. So if there’s not a formal guarantee statement that’s provided with a bunch of disclaimers and fine print, you’re probably dealing with a scam.
What about Consolidated Credit? We don’t make any guarantees about being able to help just anyone. We don’t have any magic bullets and this service won’t work for everyone. We can’t even tell you if our solution will or won’t help you until you have an initial consultation with a credit counsellor. And the only guarantee that we make is that if you qualify for the program and complete it successfully, you will eliminate your credit card debt.
Sign of a scam No. 2: Unsubstantiated claims
This carries on from the first sign of a scam. Unsubstantiated claims are when a debt relief company states a specific number that they can’t back up.
“This program will boost your credit score by 100 points or more over the next year.”
This claim is different from one that’s too good to be true, and it’s harder to spot because it may have a grain of truth to it. For instance, if you’re a consumer with a rock-bottom bad credit score of less than 600 and you take certain actions over the course of a year, there’s a good chance you could build your way to a score that’s 100 points better within a year – with or without their program. However, that claim doesn’t apply to everyone.
Ever see the fine print on commercials that reads something like, “Results not typical”? Well, that’s where this sign of a scam comes in. Any numeric claim that a company makes should be backed up by data. And any representative that works for the company should be able to give you the information that backs up that claim.
What about Consolidated Credit? On the homepage of our website, you’ll see that it says that we can “Reduce your total credit card payments by 30% to 50%.” That’s a statement we make because the average debt management program enrollee sees monthly savings within that range. The statement was even cleared for use by the FTC because we have the client data to support it. Don’t believe us? Find real case studies from actual clients in your state in our section called Debt Consolidation in Action.
Sign of a scam No. 3: Upfront fees
There are several federal laws in place that prohibit debt relief companies from charging fees upfront before any services are rendered. When companies charge fees upfront, they basically make you pay for the initial consultation and all of the paperwork they do on your case. You pay a bunch of money to them to get started only to find out a few weeks later that, “Sorry, it turns out we can’t help you.” They have your money and you’re no closer to finding a solution than you were when you started.
A debt relief company should only be paid once they actually start helping you. So credit counselling agencies should only get paid after your creditors have agreed to allow you to enroll their debt in your debt management program. A debt settlement company should only get paid after they’ve settled at least one debt on your behalf. If you’re paying before you see any actual relief or you’re charged upfront fees without a money-back guarantee or written refund policy, be careful because it’s probably a scam.
What about Consolidated Credit? The initial consultation with a credit counsellor – whether you get the consultation from us or another credit counselling agency – is always free. Fees are only assessed once a person is qualified and enrolled in a debt management program. Those fees are set based on the person’s debt and budget and rolled into the monthly program payments, and they’re capped by law.
Sign of a scam No. 4: No BBB rating
The Better Business Bureau is your best resource when choosing a reputable service provider in almost any area of your life, but especially when it comes to financial services. If the company doesn’t have a BBB rating because they never applied for accreditation, that’s a bad sign.
Of course, if the company is rated by the BBB and it’s rated badly, that’s not good either. You generally only want to work with A and A+ companies to ensure you’re working with legitimate services that work the way they claim they work. But even a B-rated company is better than a company with no rating at all. Avoid no-rating companies altogether.
Just make sure to read any debt relief service provider’s page carefully. Other big warning signs are class action lawsuits by State or the federal Attorney General’s office. You should also be wary if the company has a number unresolved complaints.
It’s important to note that the one financial relief service where this tip doesn’t work is with credit repair. The Better Business Bureau does not rate any credit repair service because the industry as a whole is so problematic when it comes to fraud and scams. Since disreputable services are so few and far between, the BBB won’t even rate a credit repair company. So if you’re repairing your credit, you may want to figure it out on your own or simply work with a local state-licensed attorney.
What about Consolidated Credit? We’ve been with the BBB since 2007. We haven’t faced any government actions for marketplace conduct or advertising. As with any company who’s been in business for as long as we have, we have some complaints. But even when things go wrong with customers, we work to correct the issue so that person can move forward, either with or without our assistance.