Watch out for bad debt relief companies

Credit cards, student loans, mortgages, car payments; sometimes, the list of debts to pay off can feel overwhelming. Add to that the loss of a job, an illness or other unforeseen circumstances, and consumers may need a life jacket. However, BBB warns you to think twice before turning to a debt relief service.

The Federal Trade Commission offered up five warning signs to watch out for in a debt settlement company. Those tips focus on claims debt relief companies make in order to get your business.

The FTC said consumers should stay away from companies that promise to settle for pennies on the dollar, ask you to stop making payments, claim they can remove remarks from your credit report, tell you that creditors never sue, or charge monthly service fees or ask you to pay them a percentage of what they save you.

In addition, BBB offers the following tips to those considering a debt relief company:

    • Research the company with BBB. Find out how many complaints it has received, how the firm responded to complaints and whether there are any government actions or lawsuits against the company.
    • Contact lenders first. Try to work out an agreement directly with creditors before enlisting outside help. This can be done for free.
    • Seek help from a non-profit credit counseling center. Credit counseling centers can provide guidance for little or no cost. Visit http://www.nfcc.org for the location of the nearest center.

~ Amy

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One Response to Watch out for bad debt relief companies

  1. Pingback: Credit Card Debt Relief Companies. What You Need To Know « Christian Debt Settlement

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