Debt Consolidation Companies - Still as ugly as they used to be
For updates in the industry, click
here. - Last update November 12, 2007
Since I
first wrote about debt consolidation companies in early 1999, I have watched
them grow into big business. They used to be the biggest advertiser on the
internet back in 1999, now you can see TV commercials about these guys more
often than you see Coca-Cola ads.
The days of
Ameridebt are past...and so are debt consolidaiton companies. The title
"debt consolidation company" itself received so much bad press that some of
these companies have repackaged themselves as "debt
negotiation" companies or "debt settlement" companies. Are they as bad as
debt consolidation companies? They are worse, using tactics that are not
legal. Stay away from these types of companies.
Many debt
consolidation companies are in hot water these days: they are being sued by
numerous attorney generals, the FTC and the IRS is investigating their supposed
"non-profit" status. We recommend against doing business with any debt
consolidation company, but if you really feel you want to risk your credit and
money you don't have, check it out with your local consumer protection agency
and the Better Business Bureau in the company's location. Several debt
management companies are also touting the fact that they have A+ ratings with
the better business bureau. (There is a lesson here, it's good to complain to
me, but why not also complaint to the BBB, your state attorney general or the
FTC?) Most people don't go the extra mile when they have been taken by any
company, preferring just to grumble. Others are so new that there hasn't been
time to lodge complaints. Should you look up their standings anyway? Sure.
We've identified the following companies as being debt management companies, and
because of the fact that they are debt management companies, we advise against
them. Want more info? Here's a great article by the
Consumer Federation of America.
Please note: Several debt consolidation companies have told their
customers that if their name does not appear on this list, that it is a stamp of
approval. Don't believe them! These guys change names so fast it's hard to keep
this list up to date! Want to see a list of all the companies about
whom we've received positive comments?
Here it is.
- 1st Federated Consolidation
- 1 Stop Debt Consolidation
- 4A Debt Consolidation
- 800CreditCardDebt.com (see the explanation above)
- A1 Debt Consolidation
- AIM Debt Consolidation
- Allied Debt Consolidation
- Amalgamated Credit Counselors
- Amansco Credit Services
- American Debt Consolidation -
epinions rating
- Amerix -
read the opinion of someone who worked there.
Oh and FYI, this company was started by the founder of Genus.
Read more.
- Budget Planning Services
- Cambridge Credit (or nodebt.com)
- Consolidated Client Services
- Christian Debt Consolidation (Or any name with "Christian" in it. I mean
really, - how scummy can you get to play the religion card?)
- Credit Advisors
- Credit Solutions of America (They
have a good BBB rating.) We've also received a nasty-gram letter from them
threatening legal action if we don't remove their name from this list.
- Credit Solutions Phoenix
- DebtConsolidation.com
- Debt Consolidation Alliance
- Debt Consolidation Online
- Debticated (AmeriDebt's for-profit company division)
- Debt Management Credit Counseling Corp - click on this
link to see the info we have on them.
- Debt Management Enterprises
- Debt Management
- Debtscape (formerly Neway, which is also
AmeriDebt)
- Debt Solutions USA - they weren't on this list until the owner contacted me
and demanded to be taken off the list, and I did research on them. They are
based in Florida (one of two unregulated states in this area - danger) and have
had 3 complaints lodged against them with the BBB (according to the owner),
though they were "resolved". Their BBB rating is good, though. See my note above
about resolved BBB complaints. Also known as www.No2Debt.com (listed below)
- Debt Specialist Network
- Debt Zappers
- Delray Credit Counseling
- Financial Freedom Southwest
- Freedom Debt Relief - BBB reports satisfactory listing, but complaints about
this company have been filed with them, though the BBB says they were resolved
satisfactorily. Other notes: this is a new company and has an alias, (FREEDOM
FINANCIAL NETWORK, LLC). We've also received a nasty-gram letter from them
threatening legal action if we don't remove their name from this list.
- Fresh Start America
- Genus - Read about them in the
Washington Post and
Business Week.
- Gibson Trust
- HomelandFinancial.net - we received a letter from a reader who was ripped
off by HomelandFinancial and wanted to warn other about these guys. They also
operate under: www.befinancialservices.com, and www.prosperfinancial.net
- iDebtAssitance.com
- Integrated Credit
Solutions
- Jabez Financial Group Inc.
- Jubilee Financial Services Inc.
- Lighthouse Credit
Foundation
- National Consumer Resource Center
- National Debt Network
- Neway - Actually, this is AmeriDebt masquerading
under another name - even their websites are identical
- Norstar Consolidation
- No2Debt.com (aka Debt Solutions USA, see above)
- Paramount World Inc. Debt Consolidation Services
- Union Financial Services
I would avoid any of the companies listed above or any other company that
resembles them. Why? Because, in my opinion, they are ALL bad. Run, don't walk
from them. Some of the companies above advertise prominently that they are
non-profit, but others don't even bother to do that. Why is non-profit a
convenient masquerade? Business Week did a
great article on debt management companies on October 29, 2001, and found
all kinds of nasty details about how non-profits can be highly profitable. For
instance, the CEO of Genus was found to be making a over $300,000/year salary.
AmeriDebt directed $2.2 million dollars worth of business to for-profit
operations owned by officers of AmeriDebt.
One final note, since the states of Florida and Maryland don't regulate this
kind of consumer service, watch out for any company doing business out of these
states.
I get so many letters asking me which of these companies I would recommend.
My answer: Stay away from ALL of them. Whatever they can do, you can do
yourself. However, if you still feel compelled to seek one out, here is our
tipsheet. If you are already enrolled in one, then here are
some tips to get out. Again, be very cautious. Before you do business with
any company, check it out with your local consumer protection agency and the
Better Business Bureau in the company's location.
Have we said not to use any of these debt consolidation/debt negotiation/debt
settlement companies enough? I counted four times. Hopefully, you will take our
meaning.
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