Crucial Tips To Avoid A Debt Settlement Scam

People who are drowning in a pool of debt often look for uncomplicated and speedy solutions in order to get rid of their loans. In such a moment of crisis, a debt relief company appears to be a savior to put an end to their debt problems.

There are various settlement companies who are willing to give these people relief from the torment of debt. Unfortunately, consumers usually do not research the authenticity of the firms and are often fooled. They frequently trap themselves with a fraudulent debt settlement company. As a result, there has been a huge increase in the number of people filing complaints with the FBI regarding scam debt settlement companies.

Before you enroll with a settlement company, be sure to evaluate the company to ensure it has Better Business Bureau (BBB) accreditation and an association with the National Consumer Debt Council. You might also look for a reliable debt settlement attorney who can help you get out of the debt trap.

5 tips to avoid a debt settlement scam

  1. Your first priority should be to gather information about the company you are planning to enroll with. Verify the details provided by the company at the Attorney General's Office and with the Federal Trade Commission in order to check the legitimacy of the firm. You can visit the company website to view video testimonials provided by the clients and even analyze the feedback form. Before enrolling with a debt settlement service make sure that it is BBB accredited. 

  2. If your debt settlement company asks you to provide sensitive personal information, be cautious. An authentic company would expect you to provide names of the creditors, your amount of debt, and the interest rate on the outstanding balance. If they ask for your social security number, make sure that the company is bonded and insured so that your personal information is protected. If the company asks for such personal information as your mother's maiden name or banking passwords, then avoid these kinds of companies. 

  3. There are many scam companies that would ask you to make the monthly payment without forcing you to pay the initial fee. In such situations, if the firm does not provide you with an agreement between you and the company, it might be a sign you're getting involved with a fraudulent debt settlement company. 

  4. Before you enroll with a debt settlement company make sure that you go through the fine print of the agreement and ensure that there are no hidden fees. There are many companies that might charge you at the middle of the settlement program once you have signed up with them. 

  5. For help in finding a reputable settlement company, ask people who have already gone through a settlement program recently. Your friends and co-workers can also guide you in locating a trustworthy settlement company.

These are just a few tips to help you avoid a debt settlement scam. It's only your common sense that further keeps you safe from the clutches of these companies. 

Guest post by Marc Brown

Debt settlement scams can be avoided by doing your "homework" before signing any agreements. For more information on getting out of debt, read the following articles:

  1. Home
  2. Debt Solutions
  3. Avoiding a Debt Settlement Scam