ROCKFORD, Ill. (WTVO) — A new study shows some companies promising to fix credit or debt problems fail to deliver.
The warning comes from the Better Business Bureau, who says it has received more than 11,000 complaints about debit and credit assistance, in which it found a pattern of high fees and overstated promises.
Some consumers reported being worse off after paying for the services.
Predatory debt relief, consolidation, and credit repair companies advertise quick and extensive fixes for low credit scores and defaulted debt, but the ability to enact change is often much more limited than implied.
“This year, debt is expected to rise amid climbing interest rates and with the national pause on student loan payments expiration. Consumers facing tough financial situations may turn to debt relief, consolidation, and credit repair companies, unaware that predatory companies could cost them thousands of dollars for little or no benefit,” said Dennis Horton, director of the Rockford Regional Office of the BBB.
To avoid being the victim of a scam, the BBB says:
- Use AnnualCreditReport.com to get a free credit report
- Don`t pay or provide payment information until service is rendered
- Critically examine any guarantee made. Few, if any, companies can ensure a credit or debit company will agree to negotiate with them or adjust reports.
- If you are in default, call debt holders and attempt to negotiate a lower debt payment.
- Check monthly bank statements to avoid recurring charges from companies.
- Search online for free information.
- Don`t be rushed. Unscrupulous businesses and scammers both use high-pressure tactics.
- Avoid giving away personal banking information until you are 100% certain a company is legitimate.
- Refuse to work with companies that won`t tell you your rights regarding credit repair or debt relief.
- Be wary of anyone claiming to be associated with a government agency.
Many scammers will use high-pressure tactics to take advantage of people. The BBB advises against giving out personal banking information until obtaining proof that the service is legitimate.
