Debt consolidation can be bad in some ways. There are more debt consolidation companies now than there were three years ago. On the Internet alone, they were some of the biggest advertisers, and now, when it comes to TV ads, they are ahead of the big names. Some of these so-called debt consolidation companies are doing things that are against the law, especially when they use the word "non-profit." More and more people are being sued by the FTC, the IRS, and a huge number of attorney generals across the country.
One of these companies is being sued by the FTC and five different states. It is also being sued by the federal government. The company even filed for bankruptcy, but they haven't stopped doing business. In fact, all they did was change their names and start doing business as new companies. So far, this was one of the worst.
Still, it's not surprising that many companies no longer call themselves "debt consolidation companies" because of the bad press this case has gotten. So, you should be careful and stay away from companies that pretend to be debt negotiators or debt settlement firms. Some of them are the same kinds of companies that still do things that are against the law.
Your consumer protection agency and/or your local Better Business Bureau are the best places to find out about a company's history. But even the information from the second group is not reliable. A good score from the Better Business Bureau doesn't mean anything. More than 75% of complaints about a company don't hurt its ratings once a solution has been found. Also, keep in mind that the Better Business Bureaus don't have the power to look into any complaints about debt consolidation firms, and they definitely can't make any changes.
The best piece of advice is to just stay away from debt consolidation companies with registered addresses in Florida or Maryland. Sad to say, these states have no rules to follow. Since there are so many different companies that offer these services across the country, you may want to err on the side of caution and look in other states. This could save you a lot of money and the worry that comes with dealing with companies with bad reputations.
There are some websites that focus on customer reviews about debt consolidation companies. It's worth looking into because you can get useful feedback from people who are using or have used a company's services that you may be thinking of joining.
