One of the cold hard facts of society is that deceitful people love to prey on the misfortunes of others. This hurtful trait of human nature can affect people in many different ways. Instead of helping the individual to financially recover, he or she simply takes advantage of the situation.
Here are some common debt relief scams which consumers need to know and avoid at all costs:
The Scam of Credit Counseling
The job of a credit counselor is to view an individual’s financial situation and provide the consumer a better way to understand and manage his or her monetary obstacle. Counselors help the consumer develop a proper budget and teach the individual ways to not only pay the bills, but also avoid a future debt risk.
Once a consumer understands what a credit counselor is supposed to do, that individual can better understand when he or she is being used, preyed upon, and manipulated.
Credit counselors should never ask a consumer to agree to excess signing fees for the counseling service. Anything over $50 should serve as a warning sign to the consumer. Chances are if a consumer is encouraged to fork over a large sum of money for a simple signing fee, the credit counseling service just wants that individual’s money- and nothing more.
If a relief service asks for important financial information before taking the time to explain the proper services the company provides, this is another scam tactic. Counselors should explain to the consumer the services the business provides before asking for excessive fees or personal financial information, such as account numbers, etc.
Debt Relief Negotiation Firms
If something is too good to be true, then it probably is too good to be true. When a debt negotiation firm makes big promises, it's important to pay attention and ask questions. The idea of finding a single company to handle a consumer’s each and every lender plus provide a lower payoff amount, is simply not possible. The "quick and easy sales pitch" will not work in the literal sense.
Many times an empty promise is filled with expensive fees. Basically, if a consumer wants a miracle…he or she should be ready to pay an "extra special" charge. If a company promises to easily handle all of an individuals "financial woes," then pay close attention.
By paying huge fees for the company service the consumer could encounter even more debt than before the relief agreement was put in place.
Never agree to obvious empty promises based on how much an individual will pay the company. If a relief firm wants the consumer to "own up" before help tactics are discussed, it's most likely a scam.
Debt Management Scams
Plans that involve giving money to a company each month in order to pay off debt is very suspicious. Made with a promise to the consumer the money will be used to pay off the individual's financial deficiency, the company can then take the money and make it work for them.
Consumers are advised to never take the bait so easily. Never give "empty trust" to a company to pay off debt without asking important questions. When a consumer puts blind faith into a company to pay off his or her arrears, a true scam artist can easily seize and capitalize on this vulnerable situation.
Consult with a solid, respected, and proven debt management program before a random company "manages" to take all the money.
High fees seem to be the "hook" when it comes to monetary help and relief fraud. Consolidation scams prove no different. High interest fees or in some cases "hidden" fees will actually make the overall charge to consolidate much larger. Sure, the consumer is only responsible for a single loan, but at what cost?
With high or hidden charges, the consolidated loan could even put an individual in greater debt depending how effective the scam is constructed and how naive the consumer.
Build Financial Trust
Just like hard earned money belongs to the consumer, financial hardships also belong to the consumer. Never let greedy and selfish "professionals" make money off an individual's personal financial struggle. Consumers are advised to carefully select honest certified experts and avoid the painful consequences of dealing with lying swindlers.