Tips for Avoiding Debt Reduction Scams
Monday, June 29th, 2009 Subscribe To Our Feed
I have read a lot about the federal debt reduction initiative and I must admit none of it has been good. From everything I am seeing, they are trying to separate you from your money. This tends to be more of a problem when people are looking for help. A scammer is in the business of telling you what you want to hear and then taking your money and running.
There is no such thing as a federal debt reduction initiative. You can use a nonprofit credit counseling company or a debt settlement company, but there is no direct government agency that is going to help you get out of debt. But if an organization is trying to appear trust worthy, it always sounds good if they sound like they are affiliated with the federal government.
If you have debt, you are going to have to decide how you want to manage it. But if you are going to seek help, make sure you know who you are doing business with. Find out what the BBB has to say and also see what the forums are saying. Just because someone has a complaint against them does not mean that they are dishonest. What these companies are not liked by everyone and the business they are in is unpleasant. This be cause for someone to issue a complaint. Any reputable company will do their best to resolve the complaint in a professional manner.
A good alterntive is a nonprofit service company. Rarely would a scammer go the nonprofit route. Keep in mind that just because they are nonprofit, that does not necessarily mean they are free. They do need money to cover their expenses. Credit counseling companies usually charge a setup fee of about $50 and a charge of $30-$50 every month. If they are trying to hold back your first month’s payments, look elsewhere. If you offer the federal debt reduction initiative, check it out carefully.
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