Many scam companies will operate from a rented post office box with a fake address attached to it. Make sure that you research the address and double check the telephone number given. Once you have verified the location of the address and the telephone number, phone the company and see if they give you the same answers as their provided information. If the telephone number and the P.O. Box does not match the same region and the person on the telephone gives you different answers, you have a scam on your hands. Finally, make sure to always see if the company has been listed and registered on the Better Business Bureau as they vet out companies. You may also want to check online to see if there are any complaints against the said company you are researching.
Never Pay Up Front
There is nothing worse than making a large up front payment and having it vanish into thin air. Keep in mind that your credit cannot be repaired by debt consolidation companies and that advance payments are not legal in the United States.
Communicate Before Committing
Always confirm that the company you are researching is not partaking in any illegal practices. One way of doing this is communicating with your current creditors as they may have debt
consolidation partners who can work directly with you. Plus, they may even be able to provide you with a financial plan for debt repayment, which could help you avoid consolidation altogether.
Read Extensively
Never sign anything without reading. Although the fine print can be annoying to read, it is imperative that you understand what it says. Often there are hidden fees and loop holes within the fine print that allows untrustworthy companies to charge excessive interest rates or dodge legal action.
Stay Alert
If a company is asking you to provide access to your bank account so that automatic withdrawals can be set up, this is a red alert. Although automatic withdrawals are convenient, they can open you up to scammers who take your money but don’t pay your creditors. If you end up in a scenario where fraudulent payments are being made, it can hurt your bank account, and you may have to close it completely.
Look for Non-Profit or Free Credit Counseling Services
These types of companies won’t aggressively require you to sign papers and they will not try to get you to do a “debt settlement” plan either. Rather, they will help you find legitimate companies that can work with you to create a financial repayment plan that works best for your budget. Finally, always make sure that every credit counseling service you communicate with is accredited and backed by the National Foundation for Credit Counseling.
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