DEBT CONSOLIDATION SCAMS
This section is a warning about Debt Consolidation scams. I have been working in the Credit Counseling/Debt Consolidation field for the past 10 years and so I consider myself a bit of an authority about this industry. I no longer work in this industry for several reasons,
the main reason being that I HATE IT! I don't trust these companies because I've seen how they operate and it's not just you the potential client that they hurt--they also pray upon the needs of their employees.
These companies' main concern is the number of sales per month that
their counselors bring in; it's all heat and pressure. If the employees
don't perform by pulling in a pre-set minimum amount of new accounts
each month they are harassed or even fired. I honestly feel that
is why so many companies that started out trying to be honest
have gradually turned into scams. These people have to make their quotas
or they lose their jobs, and in order to make those numbers the
counselors become sneaky and misleading while speaking to their clients.
You are being "pitched"--I illustrate this statement with evidence,
please see our page detailing a Debt Consolidation
Script. This is an actual script that I've picked up along the way.
This particular script is currently being used in two different Debt
Consolidation companies. This is nothing; I've seen worse.
I personally worked for a Debt Consolidation company where I was the
Training Manager for a brief period of time. I don't lie to people
(and I still managed to make my quotas) and the owner of the company
thought that I might be able to teach others how to "sell" honestly.
Unfortunately, the number of sales went down significantly, so that
position didn't last long. Most people could not compete with the
other Debt Consolidation companies that were also
"pitching" our clients and who were not being honest with them. Who was
giving the better deal to the already cash strapped client? Not the
honest counselor. So we lost sales and management again turned a blind
eye to what the counselors were saying on the phone.
As I said, most Debt Consolidation companies are nothing more than
telemarketing companies disguised as legitimate business. Many owners of
these companies have been involved in some sort of telemarketing
business for years; Debt Consolidation is simply the telemarketing room
flavor of the moment. Next year, they might be pitching
vacation packages over the phone. Not only do the
"Credit Counselors" have quotas to
meet, they also work on commission and have a bonus structure. The more
new accounts that they bring in the more money they can make.
Most scam Debt Consolidation companies hide behind a
not-for-profit status. They count on people not fully
understanding what that term means. In layman's terms not for profit is
nothing more than a tax status. It does not mean that they don't
charge for their services or make any money. On that note I need to also
warn you about trusting the Better Business Bureau, the American
Association of Debt Management Organizations (AADMO), the International
Organization for Standardization (ISO) and British Standards (BSI)
emblems that you will see posted proudly on many of their websites.
There are ways around every rule and watchdog. Children always play
nicely while the parents are watching, but as soon as the babysitter is
in charge all hell breaks loose. Again, I've seen it, I know.
I would suggest that Better Business Bureau, ISO and BSI re-evaluate who
they are granting their seal of approval to or perhaps keep better track
of the companies that meet their high standards. They may find that the
second they leave the building that conditions, practices and standards
change radically in the offices that they certify, at least in this
industry. It is my understanding that the members of the Credit
Counseling industry (the owners of the Debt Consolidation companies!)
formed AADMO so, well . . . you get the idea.
Please read my page called The Truth Behind
Debt Consolidation Programs for more information about
the actual mechanics of consolidating debt and what these companies are
supposed to do. This page that you are now reading is a warning to others and
a chance to get this off of my chest.
Keep in mind that there are some honest Debt Consolidation companies out
there. Good luck determining who they are, though. It's very hard to tell
them apart. My advice to anyone who needs to get some help with their
bills is to try to do it yourself. This website gives all sorts of tips
and advice for everything from getting and reading credit reports to
dealing with the creditors. Take this information with my blessing and
if after you read it all and give it a shot on your own, if you still want
to get some help you just let me know and I'll help you get in touch
with a reputable company.
If you decide to use a company that you find on your own you must check
the company out first with both the State Attorney Generals Office and
the Federal Trade Commission (FTC). You will find links to both of these
offices in Katie's Links under Government Programs and Consumer
Awareness.
Oh yes, and be sure to read my link on the newest scam Christian Debt Consolidation Scams. This new
racket is so despicable that I felt they deserved their own page.
One last note, to any Scam Debt Consolidation company that is angered by
my words on this or any other page on this site: I say BRING IT ON! At
that point I will be pleased to start naming names, and pulling out
documents that I have saved for the last 10 years to verify all of the
claims that I've made on this site.
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