4 Signs to Help Detect Shady Debt Consolidators

2007-03-08 10:33:40

( Financial )



If you are planning to secure a debt consolidation loan or program, you are most likely one of the many who are already having difficulty in paying off their numerous debts. However, before you start contacting debt management companies or debt consolidators, you first need to know two important things. First, not all debt management groups are legitimate. There are many unscrupulous institutions or persons that pose as debt consolidators to secure valuable information that they can use to steal your identity. Second, there are a number of debt management companies and debt consolidators that are just interested in earning or making money, not in helping you reduce your debt. However, there are four signs to help you identify debt consolidators that you should stay away from.

Extraordinarily low monthly payment quotes

Shady debt consolidators usually provide very low monthly payment quotes to entice you to sign in. Once you have signed up for their debt reduction program, such a credit card reduction scheme, they will tell you that mistakes were made in the calculation of their quote and would require you to pay extremely high monthly payments. To help prevent being tricked by dishonest debt consolidators, you should consider the consolidation fees and not the monthly payments when comparing quotes from different debt management companies.

Personal or private information requests

Debt consolidators will need pertinent information to determine your situation and help them provide you with an accurate quote. It would be wise to be ready to provide them with the list of your debtors, remaining balances and interest rates. However, you should be wary if the debt consolidator is asking very personal and private questions, such as social security or account numbers, before giving you a quote. They might use these data to steal your identity. Only the list of creditors, interest rates and account balances are needed to give you an accurate quotation.

Inability to provide specific payment dates

You should think twice before signing up for a debt reduction program from a debt consolidator that cannot provide you with actual payment dates – including the month, day and the year. Shady companies usually only provide vague payment dates and details because they are only interested in getting information or money from you, and not providing you with a good debt reduction program.

Very high upfront interests or fees

Don’t sign up with a debt consolidator that requires you to provide large upfront fees or deposit, even if they promise to refund the money after the completion of the debt reduction program. There is a big chance that your large deposit will never be returned.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.