A recent report says that many debt consolidation agencies that say they are non-profit actually stand to make money at the expense of people who need debt counselling. Even though these companies say they are non-profit and help the people who need their services more than the business as a whole, most of them charge high fees. Some people also offer consumer debt counselling, but it has been found that it doesn't give good advice. Some of these companies have been caught in the act of giving bad advice or outright lies and charging a lot of money. This means that they are using the fact that they are a non-profit to attract people who are desperate for help. Estimates show that the amount of debt in the U.S. is growing, and since more than 9 million people contact a debt counselling service each year, the business is growing.
Even though they are supposed to be non-profit, many businesses are very aggressive about getting customers and making the most of their business. The fact that these businesses are non-profit is just a front. In reality, their clients have less access to real help when it comes to getting out of debt. Instead of telling their clients about all their options, these companies usually try to sell them on the idea of a consolidation loan. This, of course, means that the people who owe money will end up owing money to the company instead of the people they owed money to before. Even though both the state and federal governments have set up consumer watchdogs to keep an eye on these practises, many of the companies are good at hiding the fact that they are doing questionable things.
Even though there are a lot of sketchy businesses out there, it's important to remember that not all non-profit debt consolidation agencies are bad for their clients. Many legitimate companies have found new ways to meet their clients' needs by introducing new ways to reduce debt and make the process easier, such as longer hours, easy access via the Internet or the phone, and electronic bill payment options.
Even though there are a lot of legitimate businesses out there, the number of complaints from customers about non-profit debt agencies keeps going up sharply. The main problem that people seem to have with bad companies is that they often do things that are misleading and dishonest. One of the biggest lies is when companies say that fees are optional or don't tell potential clients about the fees. Another thing that people do is forget to pay the debtor's creditors.
Another thing to watch out for with not-so-reliable non-profit debt consolidation companies is that they might charge too much. The original idea behind debt consolidation companies was to lower payments and make them easier for people to pay. But some companies today charge fees for their services that can be as much as a full month's worth of payments.
One of the best things about being a non-profit is that organisations with this label don't have to pay taxes in many ways. This means that there is even more potential for the companies to make a lot of money, since they do things like run expensive advertising campaigns, sell debt management programmes, and pay their executives salaries that are much higher than the average salary at most non-profits.
If you're thinking about using the services of a non-profit debt consolidation company, make sure to look for signs that the company you're looking into is, in fact, looking to make money. If you're not careful, you could find yourself in a worse situation than when you first walked in. Look for sources and keep an eye out for easy answers!
