Latest Posts
Home > Debt Articles > The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line

The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line


It’s probably a bad idea to start off with a negative but here it is, people in the debt relief industry are going to hate this article. Even friends of mine in the industry will be bummed. And why, because this article will tell you everything you need to look for when checking out a debt relief company to work with so you can protect yourself from scammers.

I’ll agree at the start that many, read that most, companies will not be willing to provide you with the information I’m going to show you, you will need to make the best decision possible. And if they elect not to, that should tell you something in itself. “Why are they not willing to share this information,” is the question you need to ask yourself.

I’ll also be willing to bet the moment you start asking these important questions, many of the companies will get defensive and will not want anything to do with you. They don’t want to be held accountable by smart consumers. You suddenly become not the sucker consumer they are looking for.

I suspect that no debt relief company in the United States will be able to pass all these steps with flying colors. But that doesn’t mean you should just work with any company blindly.

By doing your homework and conducting the investigation below you will have a much better idea of which company you want to rely upon to help you. Using what you learn you will be able to make an educated and informed decision about who you think you should work with.

Many Debt Relief Companies Think You Are a Sucker and Deserve to be Scammed

Here’s a secret you, as a consumer, don’t know. Many debt relief companies pretend to represent you but really laugh at you and call you stupid. They really do.

They say you deserve to be ripped off and deserve what you get because consumers never do any homework to check out the companies. Salespeople think they can lie and stretch just about any truth to close the sale. Don’t let them do that. Defend yourself and protect your family with knowledge.

The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line

People searching for debt help are in a unique class of consumers. They may not know it but they form a pool of disadvantaged people that are prime for the picking by scammers and people that want to manipulate them for profit.

People in debt are scary easy to manipulate because they are hoping for a miracle and allow themselves to be blinded to commonsense while searching for what they want to hear, not what they really need. Denial is a bitch y’all.

So here is my super secret, lip smacking guide to checking out any company that wants to charge you to deal with your debt and jump in between you and your creditors.

This group of companies includes:

  • Nonprofit Credit Counseling Agencies
  • Debt Settlement Companies
  • Debt Elimination Hucksters
  • Debt Validation Schemes
  • Anyone That Wants to Charge You to Make Your Debt Go Away
  • Not So Much Bankruptcy Attorneys, But What the Hell. Check Them Out Anyway.
  • Any Rage Against the Establishment Plan Like Tax Avoidance, Straw Man, or Other Assorted Crazy Fringe Ideas
  • Tax Relief Companies
  • Mortgage Elimination of Loan Modification Companies
  • Foreclosure Rescue Companies

Feel free to print out this article and use it as a guide to collect the information you need. I’ve made it as step-by-step as I could to make it easy to protect yourself.

Write the answers down and save this information in case the relationship goes sour in the future. You’ll be glad you did.

The Beginning – Basic Information

Let’s start with asking the debt relief company some very simple and basic questions to identify them.

  • What is your physical street address?
    Write the Answer Here:

     

     

     

     

     

    What we are looking to find out is if the company is using a mail drop or postal center to hide behind.

    While it is true that some startup companies do legitimately use these mailbox centers to receive mail, it is also true that may fly-by-night outfits use them as well to shield themselves so you can’t find out who they really are. They will close the mailbox and move on to the next thing.

    If a company is not substantial enough or can’t provide you with a physical street address then you may want to consider if they are going to be around if a problem occurs.

    If they do give you a physical street address with a suite number, do a internet search engine search for that address and suite number. Many of those turn out to be virtual office spaces. They look like legitimate addresses but five seconds of checking will show you they are just a fancier version of the mail drop mask.

    You might want to suggest you are going to be in the area and you’d like to drop in unannounced at their address. If they try to talk you out of that, that might make you wonder why.

  • Who are the owners of the company?
    Write the Answer Here:

     

     

     

     

     

    You don’t want the name of the office manager or supervisor, you want the name of the owners or managing members of the limited liability company. Once you have that information in hand, do a web search for any information about them. It’s much easier to catch serial scammers this way.

  • Is your company registered to do business in my state? What’s the registration number and can you forward me a copy of the state registration for me to see?
    Write the Answer Here:

     

     

     

     

     

    If the company is not willing to provide you with their state registration or debt relief license information or tells you it is not necessary. Don’t take them at their word, check it out.

    To find out if a company is registered to do business in your state just turn to the web. You can generally do internet search engine search for [Your State] Corporation Search, like California Corporation Search and find the state agency that is responsible for company registrations.

    If you have any questions about if the company does not need to be registered just call the state department that allows you to search for companies in your state and ask them.

  • Is your company licensed to offer debt relief services in my state? What’s the license number and can you forward me a copy of the state registration for me to see?
    Write the Answer Here:

     

     

     

     

     

    You can also do a similar search for licensing details. Do an internet search engine search for [Your State] Professional Licensing, like California Professional Licensing and find the state agency that is responsible for licensing businesses.

    Give them a call and ask if the company that is pitching you their services needs to be licensed in your state to sell you debt help. If yes, ask the kind state employee on the phone if the company you are thinking of using is licensed in your state.

Some More Easy Online Research

  • Look the company up on the BBB website?
    Write the Answer Here:

     

     

     

     

     

    See what the BBB says about the company and pay attention to make sure the address the BBB lists, matches the address the company gave you. If not, the BBB report may be for a different branch or affiliate.

    Some debt relief companies will blast you with all sorts of reasons the BBB should not be trusted or isn’t reliable. The BBB is not perfect. They’ve had some issues and even I have been critical of them at times. But they do remain the best open repository around of information about companies.

    For me the most critical parts of the BBB report to look at are their time in business, recent complaints, and if the company has any unanswered complaints.

  • Search for any information about the company on GetOutOfDebt.org.
    Write the Answer Here:

     

     

     

     

     

    Use the search box on the GetOutOfDebt.org website, probably near the top, to search for information others may have posted about the company.

  • Contact your state attorney general office and ask about any complaints.
    Write the Answer Here:

     

     

     

     

     

    You can find a comprehensive list of Attorneys General, click here. Click on your Attorney General listing and call their office to inquire about complaints.

And that’s the easy stuff!

Moving On – More Research for Professional Consumers

So once you feel confident the company is legitimately organized to operate in your state and can verify the backgrounds on the owners and know where they are physically located, the next part will be eyeopening.

Before you embark on your journey with the debt relief company we need some basic information about how effective their services are. It’s one thing to say “You can trust us, we are just innocent charitable non-profit credit counselors,” but what is the truth about performance?

Many hospitals are non-profit and charitable. Do you want to go to the hospital where 90 percent of the patients are never cured or die or do you want to go to the hospital where 90 percent live or are cured? They choice is 100 percent yours to make.

Require the Company to Show and Prove How Effective Their Services Are

If a company is not willing to prove how effect their services are, that’s a deal killer for me. Walk away. And don’t believe some credit counseling sales person of debt settlement closer that companies won’t provide performance information.

As an example that some do, look at the comprehensive transparency project Cambridge Credit Counseling embarked on. And they are one of the few, if nearly only credit counseling groups to do this.

So let’s get some facts from the debt relief company.

  • What kind of result or outcome should I expect to receive if I go with your company?
    Write the Answer Here:

     

     

     

     

     

    It is important to have a clear and thorough understanding of what services you are being sold. And you are being sold, make no mistake about that.

    Keeping a record of the benefits the salesperson promises and what the client agreement actually says you are contracting for, is important. You want to catch any promises that are not made in the contract.

  • What percentage of all people that enrolled with your company, even those that dropped out, achieved the results you claim? Please provide me with the formula for how you calculated your performance claims.
    Write the Answer Here:

     

     

     

     

     

    Here is where you are asking the company to put in writing, and disclose how they arrived at their numbers for their performance or success claims.

    As one company said to a consumer, “Our numbers don’t include people who didn’t finish the program.” That’s an important fact to know. So if 95 percent of people never achieved the results the program offered, how can a company stand behind a statement that 100 percent of clients are successful? That’s why knowing how they calculated their performance numbers is important.

    You also need to know what time period these numbers cover. Is this just for the last week, the last month, or the last decade.

  • Will you provide me with a written statement about your performance results?
    Write the Answer Here:

     

     

     

     

     

    If they say no, that’s a big red warning flag. Mumbling something over the phone isn’t good enough. You want it in writing.

  • How much are the fees for the service you are selling me?
    Write the Answer Here:

     

     

     

     

     
  • Do I have to pay anyone else for any service as part of your program? If so, who and how much?
    Write the Answer Here:

     

     

     

     

     
  • Do I have to pay you any money in advance of you providing me with the service? Keep in mind, most mortgage relief and debt relief providers may not charge an advance fee. There are some exceptions though.
    Write the Answer Here:

     

     

     

     

     
  • Do you offer a money back guarantee? If yes, I’d like to see it in writing on your letterhead.
    Write the Answer Here:

     

     

     

     

     

The Home Stretch – Almost There

Once you made it this far and still want to work with the debt relief company in question, you only have one major hurdle to cross.

Now is the time the debt relief company will try to close the deal and complete the sale. Many debt relief salespeople are commissioned sales people so they may be pushing you to sign the contract all through this process. But hold your ground and get the facts first. Don’t let them push you into signing some online contract or agreement. Ask for the agreement in writing, either sent to your email in a PDF format or sent through the mail. You need time to read the agreement and not be rushed.

Here are the key areas to look for in the written agreement.

  • Do the services described in the agreement match the services you were told you would receive when you contacted them?
    Write the Answer Here:

     

     

     

     

     

    Pay careful attention to this. Salespeople often make big claims about what you will be getting but most contracts I review contain a very different listing of services. For example, a debt settlement company with a lawyer might say they will represent you if you get sued by one of your creditors, but the contracts normally say they will not appear in court for you or with you.

    Whatever the contract says you are being asked to sign is what counts, nothing else.

  • Does the agreement have an arbitration clause in it? If so, be aware you may probably be giving up your right to go to court if a problem arises.
    Write the Answer Here:

     

     

     

     

     
  • Is there a money back guarantee in the contract if the company is not able to deliver the services promised?
    Write the Answer Here:

     

     

     

     

     

    If they provided you with a money back guarantee as part of your initial checking, make sure it is included in the contract. Also make sure it is a reasonable money back guarantee. I’ve seen some that say you are not eligible for any money back unless you make all the payments for services. But why would you want to continue to pay for services that are defective or not working for you?

  • Is the contract with the company you checked out and thought you were dealing with. Watch carefully for a switch of companies at the last minute.
    Write the Answer Here:

     

     

     

     

     

    Make sure the company named in the contract is the same one you did all your research on. Sometimes the front end companies are just marketers and do not deliver the actual service. They might even assign your contract to another entity so check the fine print.

  • Does the contract require you to pay for any services or items you were unaware of?
    Write the Answer Here:

     

     

     

     

     

    Read the fine print carefully and make sure you are obligating yourself to any expenses that were not previously disclosed.

One Last Point – And This is Important

  • Did the company insist or encourage you to contact other solutions providers before you make a final decision?
    Write the Answer Here:

     

     

     

     

     

    If the company did, they should get bonus points for this.

    It’s important that you not rush to make a decision about what path to follow to solve your problem before you investigate other possible solutions. The more education you have about possible solutions, the more confident you will feel you made the right decision.

    If you are not sure what I’m talking about, use our free online get out of debt calculator to view the different major options.

Your Decision – Should You Chose to Accept It

As I stated at the beginning, I doubt any one company is going to satisfy every question but at the very least you will be better informed about who you want to work with. Better informed that is than 99 percent of other consumers shopping for debt relief help.

So it’s time to make your decision about what company you want to bet your financial life on. Having the information and doing the research I suggested should give you a pretty good idea of who stands out to you.

Let me know what your results are when you use this guide and if you think I missed any important questions.

The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
Get Out of Debt Guy – Twitter, G+, Facebook

The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line by

Share This and Spread the Word

About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • DMP Employee

    Wow! I work for a DMP company, and I couldn’t answer most of the questions, simply because our upper management doesn’t even share that kind of information with those of us on the “front line” actually speaking with the consumer. I don’t even think our company keeps up with the “success rates”. I do agree that consumers should do their research before they take ANY step when looking for help with their debts. One big thing, most creditors in present times will NOT offer internal assistance, unless a consumer speaks to a credit counselor first – just a heads up, when telling people to speak with their creditor’s first…for example, you call Bank of America and ask for assistance on a lower monthly payment, or lower APR, the rep will ask you to hold and immediately transfer you to one of the credit counseling agencies that they work with…so it is definitely awesome to see you recommend that they do their research, because – unfortunately, there are a lot of ‘Bad Eggs’ out there.
    Now another thing that is interesting is the settlement companies. Why? Why would I pay a settlement company fees, when I can simply call my creditor to settle my debt. And unfortunately settlement companies don’t tell you that not all creditors will settle – it will all depend on a creditor’s policy…

    • http://GetOutOfDebt.org Steve Rhode

      That’s both not surprising and disturbing.

      None of the information asked for is proprietary and all needed to make a fully informed decision.

      I think you’d be surprised at how many creditors will offer internal programs and even settle debt proactively.

      The argument about why use a settlement company seems odd. The same issue would apply for why to use a DMP.

      A good settlement company can devise a comprehensive plan on how to best settle the debt and what the best timing is during the year or delinquency to get better offers.

      I’m not sure the same could be said for a DMP provider. Could it?

  • http://www.activedebt.com/ Angelo Anzalone

    Great piece Steve, asking those questions will benefit anyone considering a settlement program. The haters will always bash you for trying to help consumers because your work has cost people like Gregg the big paychecks they were used to.

    Riddle me this though… I went through this with the State of Florida when reapplying for licensing. We are performance based and our fees are a percentage of savings so we dont take a dime until we negotiate a settlement and we dont accept a settlement without the consumers approval so how can we offer a money back guarantee when we are not collecting any money?

    • http://GetOutOfDebt.org Steve Rhode

      The money back guarantee does not apply to everyone but it certainly makes the consumer feel safer. If they have not paid anything yet, then there would be nothing to refund.

  • anonymous

    I used to work for the Consult america 2 years ago. Consult america needs to be close down. They only help themselves. They eat up the saving reserves with high fees in the first 22 months of the program. They do not help people, they have young kids pitching a program they have no clue about. It is the wild wild west there. Lies lies lies…There are debt settlement companies that work because of lower fees.Consult america is a greedy company that does not care for its clients. More truths to come about consult america/credit advocates/debt logic.

  • Gregg

    Big Steve Rhode secret!!! “Many Debt Relief Companies Think You Are a Sucker and Deserve to be Scammed”. I know he says “many” (not all) and that will be his defense if questioned on this comment.
    What a way to introduce this blog post…anyone stumbling onto this post should see Steve Rhode for who he really is…earning a great living by slaying an industry every chance he gets through making these types of statements and then riding in on his white horse to save these poor unsuspecting consumers.
    Too bad the average consumer can’t see you for who you really are.
    Consumers need debt relief help as much now as they ever have and the entire debt relief industry is trying to re-build after the events of the last few years. Are there still some unscrupulous debt relief companies still operating…probably (and likely there always will be)…but consumer debt relief is still a very needed service and there are some excellent companies (like the company I work for) who are trying to survive by providing completely consumer focused, transparent and legally compliant services.
    To you we say – thanks for your help Steve!
    …cue Damon

    • http://GetOutOfDebt.org Steve Rhode

      Who do you work for?

      Ask them to fill out the questionnaire and send it in to us. We are happy to post their response to show they shine.

    • Matt

      Really, Gregg? As an employee of a debt relief company, you
      should be thankful that Steve is providing information to forewarn
      people who need relief. Does your company do that? If, so… what
      company do you work for? I’d like to pass these questions through them. Overall, I’d say that
      your comment validates Steve’s point. There are companies and people
      out there who don’t want the general public to read this material – and
      Gregg, you sound exactly like one of them. If your company is
      legitimately working to help people get out of debt, then you and your
      company should have no problem with this information. What Steve provided is obviously
      helping the consumer stay informed and proactive when researching
      companies. And in your line of work, I’m sure you know there are a
      bunch of crooks in the industry, Steve, Thanks for doing what you
      do!!

      • http://GetOutOfDebt.org Steve Rhode

        Thanks for the comment Matt. It’s so nice to hear from someone that understands in order to protect the debt relief industry we have to first protect the consumer.

        It’s not a fanatical approach. It’s good business.

      • http://GetOutOfDebt.org Steve Rhode

        It is remarkable that the objection is that this basic information to check out a company somehow destroys the debt relief industry.

        In reality, a consumer that feels more confident about who they are working with will have a better relationship with the company and move forward with confidence and less complaints.

        If you are not a scammer, how in the world would an educated consumer be a bad move?

    • http://DamonDay.com/ Damon Day
      • http://www.activedebt.com/ Angelo Anzalone

        Haha, good stuff Damon !!

  • http://www.mstarsinc.com/ Matthew Hearn

    These are certainly not unreasonable at all. Any company operating legitimately in the space should have no problem passing this gauntlet. The questions are not unreasonable and will clearly identify a solid company. Transparency is a critical and often missing piece of the puzzle in this industry. Customers should know exactly who they are working with, hold them accountable for their words and promises and expect that they will receive the service being sold. If a company cannot provide basic information on their business and cannot back up their claims in some reasonable manner, then most certainly they wouldn’t be the best choice for a consumer needing help. Formulating reasonable data on the performance of your service should be simple and mandatory. There are going to be variables at play that factor in to those performance numbers, but those factors should be disclosed. The service should be clearly explained, the results and expectations should be clear and accurate and certainly the basic business information should be verifiable. If the firm is a front-end, that should be disclosed as well. This is a point where the front-end leans on the credibility of their service provider and clearly discloses their identity, credentials and relationship. A written guarantee? Mandate it. It is easy to provide and it certainly puts their money where their mouth is. Legitimate companies will be able to provide this information. I can’t say that I disagree at all with this list of basic expectations.

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.