In personal finance, things don’t always go as planned. If your finances have gotten off track in this economy, you’re not alone. Recovering from debt takes patience and hard work, but it is possible. Unfortunately, there are a lot of companies trying to take advantage of consumers by offering bogus “debt-consolidation” services. You may have seen their ads on TV, or heard them on the radio, offering to reduce your debt by 75% or more.
Of course, when something sounds too good to be true, it probably is. If you’re deep in debt, it’s natural to want a quick fix or easy solution, but many of these debt relief companies are outright scam-artists. They use a lot of tactics, but the most common is this: they charge consumers a huge “enrollment fee” for their service, and then simply close their business and disappear with the money (and most likely reappear with a new name in the next city).
If your creditor has access to your checking account, in order to make automated payments, debt consolidation scam artists may advise you to close your checking account to prevent the creditor from withdrawing future payments. Be careful, because this can get you into far more trouble than you’d bargained for! State laws vary, but closing your checking account to avoid a payment is pretty much the same as intentionally writing a bad check. In Nevada, for instance, writing a bad check could get you 10 years in jail!
3 Comments
Caveat emptor: buyer beware! One good place for people to check of course is the Better Business Bureau but I have heard of some problems there. I would’ve also thought that closing an account is not the same as intentionally passing a bad cheque. Interesting though
Sticking to a plan, as outlined here (http://debtmanagementadvice.info/27/a-debt-management-plan-could-be-your-salvation) can really keep things on track and open up new possibilities. There are many scams and it’s true, if it doesn’t sound legit, it probably isn’t. Thanks for sharing!
There is really no such thing as a quick fix when it comes to solving overwhelming debt problems. BUT, there is always a solution which would require focus and determination in the borrowers part. What you have said in your post “when it sound too good to be true, it probably is.” The good thing is, the government is now focusing on reprimanding fraudulent debt companies who victimizes those who already are in financial trouble. But there are too many of them out there so everyone should be careful. What we the nation need is to educate consumers about these scams, your post is indeed very helpful in this area.