Not all credit and debt counseling services have your best interest in mind. While there are reputable
such things as a credit and debt counseling service, many of them are unscrupulous. They prey on fear and desperation, and make bad situations worse.
Real Credit and Debt Counseling Service
Legitimate debt counseling services provide valuable assistance to those who need help finding their way out of debt. One of the primary things a valid debt counseling service can do is help consumers bring their late credit accounts to current status without required back payments. They provide assistance with stopping the accrual of late fees and over-the-limit fees. They also work with consumers to consolidate high interest loans and revolving credit accounts. They even often find a way for clients to keep credit cards for emergency situations.
Fake Credit and Debt Counseling Services
Unscrupulous credit and debt counseling services claim to provide assistance with debt relief, but in fact end up further damaging the credit ratings and financial situations of the consumers who
believe for their scams.
Consumers should avoid a credit and debt counseling service who falsely claims to be non-profit organizations. AmeriDebt, which was shut down by The Federal Trade Commission after investigating complaints from consumers who were misled by the organization, was one such company.
They promised customers an easy way out of debt with no upfront payment fees. AmeriDebt’s customers made payments that they thought were being sent to their creditors.
They then took the money, but didn’t use it to pay down the customers' debt. This resulted in further damage to their customers’ credit ratings and continued demands from the bill collectors the customers turned to AmeriDebt to avoid in the first place. Following the company’s shutdown, AmeriDebt’s customer accounts were transferred to a reputable
credit and debt counseling service.
Consumers should be wary of credit and debt counseling services that claim that their payments will be lowered. While it is at time possible to lower interest rates, payments can’t be lowered.
A legitimate credit and debt counseling service is not likely to call you to solicit your business. If a company approaches you to sell their
counseling credit debt management service to you, it is likely that they are not offering real
credit and debt counseling.
When a credit and debt counseling service offers to settle debts for you, this may be a sign that the
credit and debt counseling service is not a legitimate one. Any consumer can negotiate with creditors simply by picking up the phone and calling his or her creditors. Be aware that the company is offering to do something that you could very well do on your own.
As a consumer in need of reducing debt with credit counseling, make sure to do your research. Don’t be fooled by a
credit and debt counseling service that will do nothing but help keep you in debt or send you further into debt. Don’t let yourself be victimized by an unscrupulous
counseling credit debt management service.
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