Here are some telltale signs of debt consolidation firms you should avoid:
- Promises that your debt problems will magically disappear.
- Claims unbelievable almost 100% success rate – anyone can be approved, no matter how bad their credit history.
- Advises you to stop paying your creditors.
- Imitates legitimate lenders and government agencies and implies they are official.
- Advertises over the top, too good to be true offers.
- Makes you phone a ‘900’ number to get information, application forms, etc.
- Charges high establishment fees.
- Takes a long time to come back to you with answers or do not give you complete answers or fudge their replies.
- Refuses to give you written terms and conditions of the debt consolidation refinancing loan.
- Guarantees you a debt consolidation refinancing loan provided you pay them an advance fee. While many legitimate firms charge an advance fee for processing the application or completing an appraisal, they would not guarantee or even imply that approval is likely. A debt consolidation firm that tele-markets to you and guarantees or represents that your chances of obtaining a loan or some other extension of credit is, under the Federal Telemarketing Sales Rule, prohibited from asking for or accepting any payment from you until you have received the loan.
- Promises to clean up your credit history for a fee. If your credit rating is damaged, only diligent effort on your part is going to help you repair it over time. Disputing accurate poor credit history to falsify your credit rating and using that false information to apply for a loan can end up with your committing a federal offence.
