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How to Avoid Credit Counseling Scams

The average household has over $15,000 in credit card debt. It’s no surprise than that many people have debt that has become unmanageable, and desperately seek help through credit counseling services. While responsible services have helped thousands of people get their credit back on track, others are notorious for taking people’s money and providing no discernable benefit.

Some companies promise that they can repair a person’s credit and improve his or her odds at being approved for a mortgage or other type of financing. Credit repair scams often charge fees for things that the average consumer can do themselves for free. For example, consumers have the right to challenge any information that is inaccurate on their credit report simply by writing a letter. When a company fails to inform consumers of their legal rights or suggest that they should not contact a credit bureau directly, it is often a sign of a scam. Some companies will go so far as to suggest that a consumer create a new credit identity using less than legal means.

Credit counseling scams are a little different. These companies offer to contact a person’s creditors and reduce his or her payment amounts or interest rates. These services promise to make a person’s debt more manageable—for a fee. While some companies may be able to do this, many offer promises that are simply too good to be true. In many cases, the consumer would have been better off by paying the company’s fees to his or her creditors.

With any credit repair or credit counseling company, it is important to do your research. Some companies offer excellent services and can be very helpful for consumers. Others are nothing more than rip-offs. Before paying any money, research the company’s reputation online. Peruse the company’s social media accounts and notice if customers are generally happy. If the reviews are mostly negative, look for another company.

Also, be aware of major red flags. If things seem too good to be true, they usually are. Be especially wary if the company asks for large up-front payments before providing any services.

At Loan Lawyers, our attorneys help people whose credit was damaged by debt collectors who engage in fraudulent or illegal practices. Our attorneys can review your creditor’s claims, and will ensure that you are not paying money that you don’t owe. To schedule a free consultation, contact Loan Lawyers today by calling (888) FIGHT-13 (344-4813).

  • ABC News
  • American Civil Liberties Union
  • CBS 4
  • CNN
  • Daily Business Review
  • Florida Trend's - Florida Legal Elite 2014
  • Florida Trend's - Florida Legal Elite 2014
  • National Association of Consumer Advocates
  • National Association of Consumer Bankruptcy Attorneys
  • NBC News
  • National Consumer Law Center
  • The New York Times
  • Avvo
  • Avvo
  • Avvo
  • Avvo
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