Individuals in debt who wish to make a use of the services of a debt management firm must study before committing themselves. An unscrupulous debt management firm can harm a debtor’s interests in several ways, so be certain to keep the following four issues in mind before hiring a debt management firm:
1. Stay clear of any agency that calls you by phone or sends you email spam: Most debt management firms advertise within the yellow pages or on the Internet, but do not over-aggressively solicit clients. Thus, there is a great opportunity any provider which does so just isn’t is not a legitimate firm. Debt management companies that follow a cold calling policy or send unsolicited emails will normally not have the ability to give any solid references. Most of these businesses don’t even maintain a reserve fund, which serves as a guarantee for the debtor that his creditors will be paid.
2. Non-profit agencies do not necessarily offer better service: Initial, not all non-profit debt management firms give their services at no cost; some firms charge up to 15% of the debt amount. Being a non-profit organization doesn’t make a debt management firm a much better and much more efficient service provider than those that charge for the services. In truth, providers charging for their service are under an obligation to absolutely free their clients of debt as efficiently as possible because they’re making a profit from their work and their profitability is directly linked to their credibility and reputation in the market.
3. In no way divulge credit card information on the phone: A reputed and honest debt management firm will never ask you to present your credit card number or bank facts on the phone. This is because they recognize that callers may be impersonated; moreover, the increase in on-line frauds is a reason enough for individuals in debt to be more cautious when checking out debt management firms. Debt management providers that are acting in excellent faith will in no way ask a prospect or an existing client to part with sensitive facts of any kind over the phone.
4. Do not believe any person who provides a deal that’s too beneficial to be accurate – it in all probability is: Frequently debtors come across debt management deals that promise to reduce their debt by half in a very short time. This rarely occurs; even so, the debtor does wind up paying high fees along with a substantial upfront amount to the debt management organization. Such providers also discourage debtors from communicating with their lenders; this is in no way a good notion and invariably leads to a negative impact on the debtor’s credit rating. If a debt reduction provider promises to offer more than some interest reduction and counseling on getting out of debt and staying debt free, the claim really should ideally not be taken at face value.