Youre in for Disappointment If Youre Looking for Nonprofit Debt
Youre in for Disappointment If Youre Looking for Nonprofit Debt Relief Companies
In recent years, the Federal Trade Commission (FTC) has slapped fines on numerous fraudulent companies masquerading as nonprofit debt negotiation and debt relief organizations. The promises these companies make are temptingbut consumers who fall for it, hook, line, and sinker, are in for a disappointment.
Claims Made by Nonprofit Debt Relief Companies
Nonprofit Services These organizations make a big show of helping you out of the goodness of their hearts.
Reduce Debt No matter what type of debt youve incurred, these organizations are willing to promise they can reduce the amount of debt by a certain percentage (approximately 10 to 50%).
Better than Bankruptcy Using frame psychology, these organizations give consumers the choice between do-or-die alternatives: work with them or risk bankruptcy.
No Impact on Credit Rating Working with a nonprofit debt relief company will supposedly have zero impact at all on an individuals consumer rating.
What Theyll Ask You to Do
In return, these companies will ask you to pay a specific amount of fee for periodic intervals. For that fee, you can ignore your bills and stop paying your creditors. For that fee, youll let them do all the worrying.
The Truth about Nonprofit Debt Relief Companies
Take a step back and ponder carefully on the claims made by these companies. Do they ring true? Do they sound too good to be true? If so, they probably are. These companies might be nonprofit on paper but that doesnt mean theyre not earning from their clients. They can just as easily overstate their operating expenses to make their balance sheets reflect illusionary break-even margins.
An Example of a Fraudulent Nonprofit Debt Relief Company
Early in 2005, the FTC had filed a complaint against the National Consumer Council, a front group of debt relief and negotiation companies, for deceiving almost 45,000 customers seeking instant freedom from debt. Under the NCC umbrella were other companies with nice-sounding names like London Financial Group and Financial Rescue Services. Falsely claiming that all their clients debt problems would be solved simply by depositing money into their accounts and getting their services aggravated the debt situation of their clients instead.
Are There Truly Legitimate Nonprofit Debt Relief Companies?
Yes, although theyre very rare. The best way to personally determine whether a debt relief companys for real or not is to ask for information from the Better Business Bureau and other similar institutions. Theyll be able to tell you if there are already consumer complaints filed against the debt relief company you plan to transact with.