Federal agencies are warning consumers about fake for-profit debt relief programs that promise to help people get out of debt. There has been a rise in debt relief agencies offering misleading and sometimes fraudulent claims, according to complaints received by the Better Business Bureau. These companies often fail to deliver on their promises, charge high fees for upfront services, and provide bad financial advice. The Federal Trade Commission (FTC) has banned over 400 companies and individuals from assisting with debt relief since 2005, affecting over half a million consumers and resulting in the return of over $41 million in stolen money. The FTC continues to add individuals and companies to its banned list, and consumers are warned to be cautious of companies that ask them to stop paying bills, request large upfront fees without financial information, or contact them first.
Nonprofit credit debt counseling agencies, like Money Management International (MMI), offer a more reliable option for consumers seeking help with their finances. MMI has seen a 45% increase in clients seeking assistance in the past year, and provides expert advice and assistance without charging high fees. Consumers are advised to research and vet any company they are considering working with and to be cautious of debt relief agencies that make unrealistic claims or charge excessive fees. Taking control of personal finances, tracking spending, and seeking the guidance of reputable nonprofit agencies can help individuals manage their debts and improve their credit scores.
