How to stay alert of a company that offers debt management
With the rise in the number of Americans who are facing dire financial consequences, it is very obvious that the debt management advertisers have also found an eager audience. Such companies often promise to slash off a huge amount of your debt by helping you pay off your credit cards in single monthly payments. Unfortunately the grandiose promises made by these debt management companies are too good to be true. The debt relief industry is a questionable industry overall and all such companies that provide debt relief to debt-stressed consumers are sitting to make profit out of your financial woes. In order to avoid being duped by your creditors, you require staying alert of the laws and updates in the debt industry. Check out the few points that may assist you in remaining aware of a company that offers debt management.
- Check the status of the company with the BBB: Before handing over your distressed finances into the hands of a stranger company, check the status of that company with the Better Business Bureau. Building the trust of consumers is one of the most important factors that a debt management company should concentrate on. Only a reputed and trustworthy company will treat you as a consumer seeking help rather than a customer. If you check that the company is registered with the Better Business Bureau (BBB), you can stay sure that this is a trustworthy one.
- Determine its non profit status: If the company that you are referring to, claims to be a non profit organization, make sure that you check whether or not it is truly non profit. There is a sudden increase in the number of scam companies who pose to have a non profit status, but are not. The non profit companies have a certificate awarded to them by the IRS. Ask for this certificate and if you see that the company representative hesitates to show you this certificate, consider giving a second thought about working with that company.
- Check the fee structure of the company: If you come across a for profit debt management company that charges advance fees for their services, be sure that they are not trustworthy. Recently the FTC has cracked a new set of rules to restrain the unscrupulous practices of the debt relief companies. This step has been taken to safeguard the debtors from the grasp of the greedy companies. The FTC has banned the charging of advance fees until the companies reduce your debts. Therefore, do not plunge in reducing your debt burden by a company that charges upfront fees for providing you service.
Even though most Americans are struggling to pay off their multiple credit card bills through debt management companies, it seems that America is once again sliding back to its spendthrift ways. Try to avoid the lure of living beyond your means and stop incurring debt as much as possible to secure your financial life.
Will FSA Take Action Against The Banks?
Most recently, a group of banks namely Barclays, HSBC, Royal Bank of Scotland and Lloyds have told those claiming refunds on mis-sold loan insurance that their cases will only be decided after hearing the outcome of their legal challenge to the FSA rules. The British Bankers Association have filed for judicial review against an order by the Financial Services Authority that the banks review the payment protection insurance sales.
Payment protection insurance, commonly known as PPI, is a type of insurance which is sold alongside financial products such as loans and credit cards to cover repayments if the borrower or cardholder is somehow unable to service the payments due to unemployment or illness. PPI is, however, controversial because there are many reported cases of policies being mis-sold to customers who end up being unable to claim the benefits resulting in banks making insane profits from the premiums that were sometimes added to the loan amount, driving up the costs for customers.
Based on a report on the 11.08.2010 this year, banks may be forced to refund up to £3.2 billion worth of mis-sold ppi and it is no wonder why they have resorted to filing for a judicial review against the FSA’s order. On the consumer’s side, it would be of great interest especially those who are presently in some form of debt or another to review their ppi to see if they have been mis-sold or have paid in excess of what they actually need to. Companies are available to assist such customers to make ppi claims and in this economic climate, any recovery is very much welcomed indeed.