Struggling with debt is stressful and upsetting. When it becomes unmanageable, people can feel desperate and even ashamed. Unfortunately, those in this situation can be easy targets for credit counselling scams.
Credit counselling offers people tools and solutions for dealing with debt. Agencies provide counselling services to help people reorganize and repay debt. However, not every party claiming to provide these services is legitimate, so looking for signs of a scam before paying anyone to help you with your debt is crucial.
Signs of a scam
- Grandiose promises – If an agency makes claims that sound too good to be true, chances are it is not a legitimate service. They may promise to resolve your debt for much less than you owe or repair your credit quickly. However, these claims are typically misleading or completely fabricated.
- Demanding payment upfront – Credit counselling may or may not cost money, depending on the agency and your specific situation. However, you should be wary of any agency asking for money upfront, particularly if it does not provide documentation on the services you will receive. Another warning sign is demanding money for a “quick fix” or refusing to allow you to make monthly payments.
- A negative or absent professional reputation – Before choosing a credit counsellor, do some research. Look up the agency online and read reviews; examine organizations it claims to be a member of or accredited by; check its standing with national and provincial associations. If they have a bad reputation – or if you cannot find any reputable information about them at all – it may be wise to find another counselling service.
- Unlawful solutions – Scammers may suggest changing your name, falsifying financial documents or lying about debt. They may claim that everyone does it or that you would never get caught. These are all signs that you should stop doing business with this party right away. A valid counsellor or counselling service would not suggest unlawful solutions to resolve your debt.
In general, you should be suspicious of anyone who claims they can eliminate your debt and financial troubles overnight. It takes time, and it can be a challenge. However, with legitimate help and tools, you can tackle your debt. Confronting debt is difficult, but it is not impossible.