I’m at odds about some of these blanket warnings to consumers about debt settlement. This time it is from the BBB out of Canada.
I completely understand that there have been and still are some debt settlement companies that take advantage of consumers with bad advice and front-loaded fees. Those warnings need to get out to consumers so they can evaluate their option prudently. I even wrote The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line to help people whittle down their options and evaluate companies.
But a recent article in Canada reports:
The Better Business Bureau is warning consumers about debt-settlement companies that may take their money and not help them get out of hock.
Don MacKinnon, the bureau’s Atlantic president and chief executive, said Thursday the agency has recently seen an increase in the number of inquiries about outfits offering to help with high credit card debt.
“In most cases, people aren’t getting what they expect,” MacKinnon said in an interview.
“And it’s very hard for them to follow up — all they have is a telephone number or an email address.”
The bureau said debt-settlement companies may randomly call people, although the number of firms offering their services via the Internet and email is on the rise.
The companies usually ask for an upfront payment, which could be hundreds of dollars, and say they will negotiate a deal with lenders on the client’s behalf.
But the bureau said going through such firms may do more harm than good and should only be considered as a last resort to avoid bankruptcy.
“A lot of people are lead to believe that it’s easy to make their credit card debt disappear, and it’s not the case,” MacKinnon said.
“Debt settlement doesn’t work for most people, and it has negative consequences, too.”
The bureau is concerned about debt-settlement companies in general, not a particular one, he said. – Source
Debt settlement, when used appropriately and under the right circumstances can be a tool to consider in SOME situations.
This article out of Canada is just another example of how good debt settlement companies need to operate openly and transparently and proactively take action to not let consumer harming companies flourish.
The head in the sand approach will not work in Canada just as it has not worked in the U.S.Canada BBB Debt Settlement Warning Both Helps and Hurts Consumers by Steve Rhode