Adding insult to injury as you try to get out from under debt, scammers who take advantage of your financial vulnerabilities can make your strides towards a debt free life even more difficult if you fall for their tricks. As more people are turning towards third-parties for assistance with their finances, there are more consumers who are being taken by con artists who are only interested in money.

While consumers have the best intentions when seeking outside help, many do not do the proper planning or research needed to ensure they are dealing with an above-board company. They fail to check the histories of so-called credit counselors in their rush to find debt freedom. But not doing their due-diligence can quickly turn into more money worries once they have been scammed out of precious cash.

So how can consumers spot the purported scam artist before falling victim? Here are a few red flags:

Create A New You
Credit counseling or credit repair services can and do offer legitimate services for getting out of debt and rebuilding credit scores but there are many unscrupulous ones that will use illegal tactics and convince you it is ok. One of the most common maneuvers used by so-called credit counselor/repair agencies is the tactic of creating a new credit identity using an EIN (Employee Identification Number). EIN’s are designed for businesses and entrepreneurs for income reporting on taxes. Some credit counselors will encourage consumers to request an EIN number, virtually giving that person a supposed “blank slate” for credit purposes. Some companies will even promote the use of a fake social security number to clear up credit problems. However, both methods are highly illegal and you should understand that the only way to deal with debt is head on. You can not run from your financial problems.

Charges Not On the Up and Up
If your credit counselor tries to convince you that creditor charges including interest and fees are not legal or that the original terms and conditions between you and your creditor are illegal, let their action throw up a big red flag. Companies go through in-depth procedures to ensure that the legalities are indeed covered. On the off-chance there was a minor mistake in any agreement, the chances are slim to none that it would make your agreement invalid.  In situations where the counselor tries to persuade you of this situation, they may go on to tell you that the creditor has been contacted and agreed to discharge the debt when in reality, the counselor has done nothing but let time pass while all along your interest and penalty charges having been accruing and you don’t find out until you get served with official court papers notifying you of the impending lawsuit.

If you aren’t sure whether or not to trust in one credit repair or counseling agency over the next, check with the local Better Business Bureau and track complaints and reviews by other consumers to find out some background and user experiences for different companies you are interested in using.

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