How To Research Debt Settlement Companies

When most sectors of the economy are experiencing strife, the debt settlement industry is in a boom. This fact alone can leave a sour aftertaste, but debt settlement companies offer legitimate help to a lot of consumers who are grappling with extreme amounts of debt and are left with little or no solutions.

Of course, the entire debt relief industry has come under fire because of the infractions of a few of its members. This is why it is important to properly evaluate every debt settlement company before you decide to turn your financial problems over to them. Failure to perform the quick checks below can result in much more trouble than the avoidance is worth and can multiply your already high debt levels.

Check Accreditation Bodies

There are a number of associations and accreditation bodies that have become recognized for upholding the highest standards of customer service and debt relief practices. They include; The Association of Settlement Companies (TASC), The United States Organization for Bankruptcy Alternatives (USOBA) and The National Foundation for Credit Counseling (NFCC).

Check the Better Business Bureau

The Better Business Bureau (BBB) is the gold standard for customer service and for supporting best practices across several different industries. Within the credit counseling and management industry however, the BBB of certain states has implemented automatic downgrades of ratings simply because of the industry involved. While the BBB is still a good resource a better choice for analyzing a debt settlement company would be an accreditation body that specializes in the industry like the ones suggested above.

Look at the Debt Settlement Fees

Some debt settlement companies charge ‘front-end fees’. This means that they take their cut before the final creditors are paid. This type of approach can be dangerous because it is often accompanied by a mandatory service fee even if you decide to change your mind against settling the debt. It is also sometimes responsible for creditor litigation because the creditors become incensed at the nerve of the settlement company and file for the remainder of the balance owed.

Consult the State Attorney General’s Office

Your state AG office is another valuable resource for information on the debt settlement company you are considering. The Attorney General’s Office is responsible for enforcing consumer protection laws and will keep a record of all offenses that have occurred within the state as divided into industries. If the debt settlement company in question is a repeat offender, clearly you should try to find another alternative.

Visit the Company Website

Finally, the company’s website can also be a good resource for a lot of useful information. The company’s payment policies, its track record for performance as well as membership with associations and boards will be mentioned. The website may also have testimonials of previous satisfied customers to put you at ease. The company’s website however should not be your only source of research as it is not that difficult to put on a good face.

Many groups are pushing for increased regulation of this industry, however until greater consumer protection is available through federal or state regulations, it is up to the consumer to weed out the unsavory characters within the industry. The tips provided here can help get you on your way to properly research a company before making your final decision.