Debt settlement companies in the cross hairs
The debt help industry is doing very well and this is probably the first time when consumers are flocking to debt help clinics. More and more debtors are opting for debt settlement as an option to get out of debt. This has happened especially after recession set in that made consumers cash strapped and pushed them into debt traps. So, when the debt settlement companies should be celebrating, they have become increasingly nervous. This may sound a bit weird but this is what is happening. And debt settlement companies are wondering if the same trend will continue in future and whether the debt help companies will be doing brisk business in the years to come.
Another increasing cause of concern is that the debt settlement companies are always locking horns with the attorney generals, the state regulators and the FTC or the Federal Trade Commission. This is because the FTC and attorney generals receive many complaints against debt settlement companies or companies offering other forms of debt help.
Majority of the consumers complain about the fee structure of the debt settlement companies. Consumers complain that the debt relief companies advertise that they will help you to get out of debt, not that they don’t deliver what they promise but there are many such companies that are not able to live up to their promises and charge fees before they deliver the services. This is very troubling especially for debtors that exhaust even their last drop saving to get out of debt.
So, the main reason why debt settlement companies aren’t celebrating is due to the fact that the debt help firms could be “legislated, regulated or litigated out of business”. This has not gone down very well with all the debt settlement companies. However, many are jubilating with this proposal since they feel that there are many companies that operate illegally or extend poor service to the consumers due to which all other debt settlement companies have to suffer the wrath.
The debt settlement companies complaint that the attorney generals, state regulators are not aware of the nature of help offered by these companies. As such they believe what consumers say.
Although there are about 2000 debt settlement companies, the services offered by these companies vary widely. In debt settlement, the outstanding balance of the debt is reduced to a great extent. To select the right debt settlement company, it is best to thoroughly investigate the credentials of these companies and then enroll for the program. The BBB or the Better Business Bureau urges consumers to understand the process of debt settlement so that it can minimize their risk of being fooled.
Contributed by Debt community Member.
Others articles you may want to read: eliminate credit card debt and consolidate credit card debt.
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