Debt Consolidation Scam – Beware

Posted on August 26, 2013 at 9:54am by

If you have gotten in over your head with student loans, credit card debt or medical bills and are wondering what to do about it, a debt consolidation may seem like a better idea than bankruptcy and what it will do to your credit rating. But beware of the debt consolidation scams which are lurking everywhere these days and may only push you further into debt. Filing for bankruptcy may be a better solution than you think.

Recently, the National Consumer Law Center did a secret shopper investigation of 10 debt-relief agencies and discovered a variety of scams, deceptive practices, and overcharging that would severely hamper any borrower’s attempt to relieve themselves of debt. Some of the most common included:

  • Charging large up-front fees before doing anything.
  • Characterizing government services as their own.
  • Charging for free government debt relief programs.
  • Not including a three-day cancellation clause in their contracts as required by law.

Companies may also solicit your business via email, snail mail, or telemarketing. They ask you for an up-front fee and personal information through a web site and, after you pay the fee and supply your info, they disappear and you have become the victim of identity theft. Another common tactic is the “bait and switch”, in which low rates are advertised but the rates that you would “qualify” for are always much higher. There are reputable debt consolidation companies out there, but they can be hard to find.

The smartest thing to do in the Kansas City area, however, is to consult with the Sader Law Firm regarding your situation. Bankruptcy may be a better solution than you realize, allowing you to start afresh and eliminate the demanding phone calls and letters that plague you. Each case is different and the best solution for you may be one you have not yet considered or may not clearly understand. Contact us today to get started on finding the debt solution that will work best for you.

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