Description: Know the red flags that would help you identify a scam debt consolidation company and why you should avoid them.
Many people who are overwhelmed with their debt burden are resorting to debt consolidation companies to alleviate their debt problems. Unfortunately, there are some scam debt consolidation companies that are preying on unsuspecting customers and making undue profits from them. These debt consolidation companies either don’t provide any services to the consumers or provide services that are not sufficient to solve their debt problems. While selecting a debt consolidation company, you must remain extremely cautious. Obviously, you wouldn’t want to be ripped off by a scam consolidation company that makes false promises to get you out of debt and actually push you further into debt.
You must steer clear of scam consolidation companies. How can you identify them? The warning signals given below can help:
Quoting abnormally low monthly payments
A genuine consolidation company would require a particular amount of payment to be eligible for their program. They can’t fix a payment that your creditor wouldn’t accept. By quoting a payment amount that is convenient for you to pay, they’re essentially trying to make some gain from you. They wouldn’t direct this payment to your creditors. When you’ve signed up for their program and are working with them for a number of months, they would hike the monthly payment without prior notice. By then, you might have paid a big amount to them which was never sent to your creditors and they would still aim to make more gains from you.
Asking for excessive upfront fees
This is the most familiar type of consolidation scam where unscrupulous companies ask for unreasonable fees at the start and assure that a part would be returned to you once the program is over. Very few people can complete their programs. A genuine company would ask for a flat monthly fee for their program.
Asking for your personal details
A legitimate consolidation company would only request your balances, the names of your creditors and interest rate for giving you a quote. If a company is requesting your bank account numbers, social security number or any other personal details, you must be vigilant. This is surely a sign of a scam company. When you provide your personal details to them, you become subject to identity theft.
Remember that you have to research to find the best debt consolidation company. Don’t forget to check the background of a company with your state Attorney General’s Office or the Federal Trade Commission. Check with the BBB to find out if there are any unsettled complaints against a company you’re thinking about. If yes, avoid that company.
Many people who are overwhelmed with their debt burden are resorting to debt consolidation companies to alleviate their debt problems. Unfortunately, there are some scam debt consolidation companies that are preying on unsuspecting customers and making undue profits from them. These debt consolidation companies either don’t provide any services to the consumers or provide services that are not sufficient to solve their debt problems. While selecting a debt consolidation company, you must remain extremely cautious. Obviously, you wouldn’t want to be ripped off by a scam consolidation company that makes false promises to get you out of debt and actually push you further into debt.
You must steer clear of scam consolidation companies. How can you identify them? The warning signals given below can help:
Quoting abnormally low monthly payments
A genuine consolidation company would require a particular amount of payment to be eligible for their program. They can’t fix a payment that your creditor wouldn’t accept. By quoting a payment amount that is convenient for you to pay, they’re essentially trying to make some gain from you. They wouldn’t direct this payment to your creditors. When you’ve signed up for their program and are working with them for a number of months, they would hike the monthly payment without prior notice. By then, you might have paid a big amount to them which was never sent to your creditors and they would still aim to make more gains from you.
Asking for excessive upfront fees
This is the most familiar type of consolidation scam where unscrupulous companies ask for unreasonable fees at the start and assure that a part would be returned to you once the program is over. Very few people can complete their programs. A genuine company would ask for a flat monthly fee for their program.
Asking for your personal details
A legitimate consolidation company would only request your balances, the names of your creditors and interest rate for giving you a quote. If a company is requesting your bank account numbers, social security number or any other personal details, you must be vigilant. This is surely a sign of a scam company. When you provide your personal details to them, you become subject to identity theft.
Remember that you have to research to find the best debt consolidation company. Don’t forget to check the background of a company with your state Attorney General’s Office or the Federal Trade Commission. Check with the BBB to find out if there are any unsettled complaints against a company you’re thinking about. If yes, avoid that company.
