Spotting debt relief scams

Florida residents who are looking for ways to handle their substantial debt may consider using the services of credit repair companies or credit counselors. The use of such companies has been increasing, as have the number of these companies that offer to assist consumers. However, the number of dishonest operators has also been increasing and potential consumers should take care to avoid their scams.

There are number of indicators that can alert consumers to credit repair scams. This includes the company requiring an upfront payment for credit repair services before any services are rendered, which is unlawful. The company will fail to advise consumers about their legal rights and certain steps to take themselves with regard to their credit, or the company may offer to provide the information for a fee.

Consumers will be advised by an unscrupulous credit repair company to not make direct contact with a credit bureau. Consumers may also be encouraged to establish a new credit report by using an Employer Identification Number instead of their Social Security Number.

With regard to credit counseling companies, consumers should be leery of any grand promises. Deceitful agencies will often promise consumers that they will be able to start anew with their credit, with the payment of an upfront fee. The counselors may promise to convince creditors to reduce interest rates and fees as well as take lower payments. To avoid credit counseling scams, consumers should verify that they are dealing with a reputable company. They should also carefully evaluate any written agreement and avoid paying up-front fees.

Individuals with large debts may want to meet with a lawyer to see what other forms of debt relief might be available. In some cases, filing for bankruptcy could be the advisable method of obtaining a fresh financial start, but there are eligibility and other requirements that must be met.