Posts Tagged ‘avoid debt consolidation scams’

3 Things to Do to Avoid Debt Consolidation Scams

When you stop making payments toward your debt, it starts growing at such a fast pace that within a couple of months, things may just go out of your control. In such cases, people often look toward companies that claim to eliminate all your debts in a blink of an eye. Though the promises made by such companies are highly alluring, these agencies often do not do what they promise. Always remember, when things seem too good to be true, they probably are. Considering the rising number of people who become victim of debt consolidation scams, it is important for you to learn how to choose a genuine service so that you could get rid of the debt trap without inviting more troubles. Following are three crucial things that you must do in this regard.

Background Check to Ensure the Company is Genuine

With the growing demand for these types of services, many unscrupulous companies have also joined the market. In fact, it should not be an exaggeration to say that at present there are more unscrupulous companies in the market than the genuine ones. Therefore, you have to be very careful. Make sure you do a thorough background check before you sign up for a specific debt consolidation program with a particular company. Check with the Better Business Bureau, Contact the Federal Trade Commission, and call your State Attorney General’s office in order to find out if there have been complaints against those agencies. This step is crucial to avoid .

Be Alert When a Company Asks You to Provide Private Information

In order to provide you a quote for the consolidated program, you just have to provide information about the names and addresses of your creditors, the amount of money that you owe to them individually, and the interest rates applicable in each case. If a company is asking you to provide your social security number or bank account details, you should take it as an alert sign. There is no need to provide social security number, bank account details, or other personal information only to get a quote for consolidated program. If you still provide the same, you are very much likely to become another victim of identity theft.

Evaluate the Program as a Whole, Not Just the Amount of Monthly Payments

Many companies try to attract customers by offering very low consolidated monthly payments, but such programs often turn out to be debt consolidation scams. Just because the single consolidated monthly installment is a very low amount, it does not mean that you should go for it. You are strongly recommended to look at the program as a whole with special focus on the different costs associated with the same, how much the agency is charging as their service fee, if there are any special penalty charges or hidden expenses, and other things like that. Most importantly, you should never pay even a single penny just to receive a quote. Reputable and genuine companies always provide free, no-obligation quotes.

Overall, if you keep in mind the above things and follow the process accordingly, you can easily avoid scams.

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