Beware Of Consumer
Debt Consolidation Companies

Scam or Reputable

Consumer debt consolidation companies have been springing up as a result of more and more people finding themselves in financial trouble primarily due to the use of credit cards.

In response to this situation, debt consolidation companies have seen this as an opportunity to swoop in and seize upon it. These companies spring up and look to take advantage of consumers financial misfortunes.

If you are interested in debt consolidation be certain that the company you are considering is not running a scam and is truly there to help you out.

Even though independent debt consolidation companies have become mainstream, the business nevertheless has attracted some that don't operate in the customers best interest.

Whenever something good comes along, no matter what it is, there is frequently a downside to be cautious of. In this case, those companies that are not operating aboveboard have found a way to turn peoples desperation into huge profits.

You may have all of your money saving techniques in place but that won't matter if you get in the middle of a scam.

Be aware and skeptical of letters and/or advertisements from companies that claim to be able to help you. Many are just out for your money and the "debt reduction programs" that they promote may not be best for you at all! They may not be worth the paper that they're written on.

It's wise to ask these consumer debt consolidation companies numerous questions before you decide to do business with them.

Hypothetical Case

Lets us take an example of a man that finally decides to go ahead and reduce his credit card debt. He has had the debt for a while and wants to get out from underneath it. He agrees to meet with a debt company that has been calling his house soliciting his participation in their best debt reduction plans.

They explain to him that they can save him a lot of money and get his debt settled for a "fraction of what he owes." They say they will use their credit card debt consolidation services to help him.

He thought that sounded really good so the man enrolled in a "credit card payoff plan." According to the company, his creditors agreed to accept just one-third of the current balance if they would be paid over a six month period.

The business arrangements call for the man to pay a lump sum up front and make payments over the next six month directly to the debt agency that originally lured him in through there solicitation.

Everything seems to be fine until he starts to get calls from has credit card companies demanding payment. The man is shcoked and confused..."But I have been making payments to the agency he exclaims."

He is correct. He has been making payments as agreed to the agency all along. He calls the toll free number so he can get some answers and all that he gets is an answering machine. The agency does not return his calls and the money that he sent them may be difficult to recover.

Whatever you do, don't let this happen to you! If you think that a consumer debt consolidation company can be right for your situation then ask these questions:

• Company History - Tell me about your company and what services you provide to get me out of this situation.

  It is a red flag if the person you are dealing with is not completely forthcoming. You should get honest answers without hesitation from any company that wants your business.

  If they make any indication that they can get information removed from your credit report, say, see you later...and hang up the phone.

• Options - What are my financial debt repayment options?

  Any company that promotes debt management programs instead of credit counseling plans is not giving you the full advantage of the best program for your situation. It's possible that they have been given incentives from a third party to push a certain program. You don't want to deal with these companies either.

Don’t believe the hype that comes from some of these consumer debt consolidation companies. Stay away from anyone that says they can modify your credit report or guarantees debt reduction.

Many of these consumer debt consolidation companies are very reputable but beware when getting involved of the few companies that may not have your best interest in mind.

Stay on track with your best ways to save money by employing effective debt reduction strategies.



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