How to Identify a Debt Relief Scam

Debt relief companies are everywhere these days. While some of these companies are reputable and helpful, others offer nothing but a debt relief scam. If you are considering using a debt relief company, it is critical that you stay away from the scams. Before you join any debt relief program, consider the following:

Check the Better Business Bureau

One of the best resources to search for the validity of a company is the Better Business Bureau. You can do a simple check on their site or get a more detailed report on the company. Just type in the name of the company and you will be given a report about their recent business dealings. You can see exactly how many people have filed complaints against them and how many have been resolved.

The Better Business Bureau will even give a letter grade to the company based on the information that it has gathered. If the rating is a "D" or "F" you might want to just forget about it. They usually do their homework and if they rate a company negatively, it is good indicator to go with another company.

Beware of Fees

Many debt relief companies will try and charge you a large fee when you join. If the fee is too large, this is a good indicator that you should not use their services. A small administration fee is customary, but you should never pay a large fee upfront. There are plenty of legitimate companies out there that will not charge you an upfront fee, do not be swayed.

Get Details

Before you join, determine exactly what it is they will do. Ask them many questions about the type of services they provide. For example, ask whether the company is offering a debt consolidation , a debt settlement or a consolidation loan. There are many different programs out there and getting the details is essential. Find out if they will notify your creditors, or if that is up to you. Get as many details about the program upfront.

Check on Payments

When you finally decide on a debt consolidation company, you need to check up on them and see if they are doing what they claimed they would do. A classic debt relief scam is to take your payments and then not make the payments to your creditors. They keep collecting the money from you, but instead of sending it to where it needs to go, they simply pocket the money.

Check your credit card accounts every month. If the balance is not going down every month, then you need to figure out what is happening. It is never too late to stop the process. Remember they work for you.


Improve Your Credit Score - Free Consultation

Need debt consolidation relief? Click here!