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Blogging for Change Blogging For Change
by sitecore\jhorton on May 08, 2013

Man frustrated at debt scam

It’s almost impossible to open your email or surf online without stumbling across ads to “repair your credit” or “get rid of your debt TODAY.”

The recent news about the New York City-based debt settlement scam company, Mission Settlement Agency, which Federal agents found to be defrauding customers of millions of dollars, serves as a stark reminder of the kinds of scams consumers encounter when seeking financial help. 

Unfortunately, as more consumers find themselves rejected for credit cards, loans, and mortgages, the temptation to pay for services to “fix” the problem on their credit report can certainly be enticing. However, companies that pledge instant elimination of your debt, or promise remarkable improvements to your credit score are not going to be able to deliver these results.

While there are steps that consumers can take to repair bad credit, all of these steps require little to no money, just time. There’s usually no reason to pay someone to do these things for you, and no one can or should promise to improve your credit.

The majority of these company offers cost significant money, and they often are unable to deliver on their grand promises. So to help you avoid falling victim to a scam, the following are five red flags to look for when seeking debt help: 

  1. Be wary of fraudulent and illegal practices. Some companies will send multiple credit disputes of negative (but accurate) records to the credit reporting agencies, claiming that information is incorrect, under the law that information must be verified as accurate within 30 days or should be removed from your record. Another fraudulent method is to recommend that you open a new social security number or employer identification number. This is also illegal and fraudulent, and does not work.
  2. Don't pay a large sum upfront. Beware companies that require money up front and recommend that you do not contact credit agencies yourself, among other things. Keep in mind that any legal, ethical method to repairing credit can be done by you, without any fee. This includes sending a 100-word statement to the credit agencies, explaining your delinquencies, disputing any inaccurate information, and continuing to pay bills on time.
  3. Don't believe absolutes. Companies that are willing to make guarantees are unually scams. If a company isn't aware of your specific situation, but claim to have the ability to eliminate your debt in one year "guaranteed", then it's time to start asking questions.
  4. Read the fine print. Review the agreement closely to ensure it outlines the timeframe for payoff, and the exact amount the company is going to charge in terms of fees.
  5. Research, research, research. The best way to avoid a scam is to educate yourself. If a company has only been around for a year or two, that doesn't mean it's necessarily a scam, but it should raise a red flag. Also, any legitimate debt consolidation or credit counseling company should be accredited by the appropriate nonprofit agencies. For example, MMI is accredited by the Association of Independent Consumer Credit Counseling Agencies (AICCA), and is also a member of the National Foundation for Credit Counseling (NFCC). In addition, MMI has roots that go back 55 years.

For more information about debt settlement scams and ways to avoid falling victim to fraudulent practices, visit FTC.gov.

 

Comment(s)

Anonymous says:
October 11, 2013

MMI has been great at helping me get out of debt on high interest credit cards. Thanks to all who work for and those who support this fine organization. They are very helpful when I have questions and have suggestions for times my DepositDirect and paycheck don't coincide.



Debt Help says:
November 16, 2014
Website: http://www.bankruptcyexpertssunshinecoast.com.au

Nice article, it could help a lot to those people who is really struggling financial situation.



Debt Problems says:
June 27, 2014
Website: http://debtfreeiva.co.uk/

I agree with the majority of the points in this article and it’s great without any doubt. Really a wonderful post! I like it very much. Here I find everything in details. I hope I will see this type of post again in your blog.Thanks…….



Georgienna Bethel says:
December 19, 2013
Website: Five signs you are being scammed

You really need to follow up and prepare yourself for loopholes



James Gleaves says:
September 04, 2014

What do you know about Lloyd Ward. Several years ago I contracted with this company seeking debt relief and agreed to a monthly payment. I now have assumed my debt has been paid off.



John Oswald says:
November 12, 2013
Website: www.howto-payoffdebt.com

Great post. I would say any company (like a debt settlement company) who charges hefty fees, to do something a person can do themselves, may be considered a scam. It's one thing to hire someone to mow your lawn because you won't want to take the time. It's another thing to hire someone for hundreds/thousands of dollars because you simply don't know what to do. I'm glad you're informing people how to settle debt on their own. I share your passion to do just that. My new book, The Complete Debt Relief Manual, was written to save people from predatory debt settlement companies. Keep up the good work.



LARRY MARTIN says:
May 11, 2013

I would like to find the proper way to eliminate inaccurate Information on my credit report. what steps to take.



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