Avoid debt-relief scams with these tips from the AG’s office

Attorney General Rob McKenna’s office has sent out some tips on how to avoid getting further into debt with debt relief scams.

“When you’re drowning in debt, you’re desperate. But if you’re not careful, your chosen rescuer may toss you an anvil instead of a life preserver,” McKenna said in the release.

Some consumers recently fell prey to a Tacoma company, called “Mutual Consolidated Savings” that was sued by the Federal Trade Commission for allegedly aggressive robo-calling. For those who took the bait, the company would charge between $690 and $899 for … no help.

Here’s how to avoid a similar ‘anvil’:

Avoid companies that:
- Promise to repair a bad credit report
- Wants you to pay before they provide services
- Fails to mention what you can do – on your own – for free
- Suggests you should not contact a credit bureau directly
- Suggests you invent a “new” credit report with an Employer Identification Number instead of your Social Security Number
- Recommends bankruptcy out of the gate

And:
Be aware that just because an organization says it is “nonprofit” doesn’t guarantee that its services are free or affordable.
Think carefully before sending money to a credit counseling organization that doesn’t have an office in your community.
Shop around. Compare a couple of services and get a feel for how they operate. The credit counselor should spend at least 20 to 30 minutes with you in order to get a complete picture of your finances.
Ask a lot of questions and get the answers in writing.

So, where do you go for some reputable names in the business?

The U.S. Department of Justice’s U.S. Trustee Program provides a list of government-approved credit counseling agencies online here
The National Foundation for Consumer Counseling provides a list of member agencies or call 1-800-388-2227 for 24-hour automated office listings.

Tags: debt, debt relief