It seems unfathomable that people would prey on individuals when they are at their lowest. However it is not only a common practice but one that is growing right now as families are being stretched beyond their limits financially. An area experiencing rapid growth for scammers is the debt settlement niche.
You would think that a person who is not able to make the minimum payments on their credit cards would not have the funds available to get ripped off in one of these schemes. If you believe that, you are sadly mistaken.
To understand how these companies are able to part people from their money, you must understand first the despair that one feels when they are at this point. The phrase “drowning in debt” is not a literal phrase, but it accurately describes how it feels when you are indebted to so many people or companies and have no feasible relief in sight.
It is a completely natural reaction to seize any lifesaving device that comes along that will keep you afloat. Of course fraudulent companies know this and will take advantage of you if you do not take the proper steps to ensure you are working with a legitimate company.
Look for the following things to avoid a company that is only out for your money.
- Avoid companies that have negative ratings with the Better Business Bureau. If they are not listed or listed unsatisfactory with the BBB you are seeing a red flag that the company has had customer issues in the past. The company should also demonstrate the required business practices and standards required by TASC– Trade Association of Settlement Companies.
- Avoid companies that claim they can stop all collection calls and activity. Lenders have the right to try and collect unpaid debt. You would be well served by becoming familiar with the Fair Debt Collection Practices Act which will help you understand what rights YOU have when dealing with aggressive debt collectors.
- Avoid companies that claim to be able to repair or remove accurate information on your credit report. You can dispute false information that appears on your credit report, but if the information is correct, it can remain on your report for the length of time determined by law.
- Avoid companies that require you give up control of your money during the length of the program. You should always retain control over the funds you will use for settlement, either in your own account or in a third party FDIC insured bank.
- Avoid companies that are hesitant to put verbal agreements into writing. Without having a written contract, you have no security that you will get the services or deals that you have been promised.
If you have decided that debt settlement is right for you, invest the time in researching the company that you will be working with. Debt settlement is not right for everyone and the process can often-times be trying as you deal with aggressive collection tactics throughout the program before your accounts are settled.
It is imperative that you are working with a reputable company that has trained debt negotiators that are able to guide you through the process of becoming debt free.