With the increase in the number of debtors in the United States of America, an increasingly large number of people are resorting to debt consolidation services. As this is the only option that can help you repay your debts and also boost your credit score, majority of the debtors rush to such firms. The most obvious reason behind the rising popularity of the debt consolidation scam companies is the rising demand of the debt consolidation companies. Unless the debtors are not aware of the scams that are ruling this industry, they can’t take the required steps that can help them stay aware of their financial woes. Though the non-profit debt consolidation companies are there to help you save your dollars while consolidating your debts, it is not always possible for a debtor to get the services from such a company. Therefore, take a look at the most common debt consolidation scams that you should take into account.
- The companies that charge huge advance fees: The companies that charge huge advance fees from the debtors are certainly scam companies. The FTC has asked all the for-profit debt consolidation and debt settlement companies to avoid asking for advance fees from the debtor before a portion of the debts are reduced by them. If you come across a company that charges you advance fees, you should report to the FTC about such practices so that solid steps are taken against them.
- The consultants who push you into accepting the terms: When you approach a debt consolidation company, it is most obvious that the debt consultant will show you the terms and conditions of their company and the process in which they work. If you see that the debt consultant is pushing you into accepting the terms and conditions of the company and is forcing you to sign up, you should go on with some other company as they may try to scam you and run away with the money.
- The companies that claim to be non-profit: There are some companies that claim to be non-profit as they want to attract a large number of debtors due to their faith in the non-profit debt consolidation companies. If you approach a non-profit debt consolidation company, you should make sure that they show you the 501 (3) (c) certificate that has been awarded by the IRS in order to prove their non-profit status. Any company that is hesitating to show you this certificate is certainly a scam company.
Before you resort to a particular non-profit debt consolidation company, you should make sure that the company is registered with the BBB so that you may be sure about the authenticity. Check the consumer records to know the success ratio of the company before selecting it.