New York Times exposes the debt settlement industry
I read a very interesting report from the New York Times that claims the majority of “debt settlement companies” (i.e., unlicensed and unregulated businesses offering debt relief) in the United States are fraudulent or deceptive, with very few businesses working towards the best interest of their clients. A link to that story is here. According to the Times, here are a few interesting points about how these companies operate: their fees are typically 15 to 20 percent of the credit card balances carried by their customers; they tend to collect fees upfront, regardless of whether a customer’s debt is actually reduced; and their customers rarely emerge from debt settlement programs…
Bait & Switch? Surprising Credit Counselling FAQs
The business of debt counselling (a.k.a. credit counselling) and debt consolidation is an extremely competitive one, particularly in Toronto. Unfortunately, there are certain financial professionals who employ questionable methods in marketing their services to get an edge over their competition. There has been a trend of “credit counsellors”, “debt counsellers”, “debt experts” (and I use these terms loosely), referring work to trustees in bankruptcy in return for compensation. From what I have seen in the Toronto area, here is how it usually works: An individual who aspires to be a “debt consultant” or “credit counsellor” will approach a bankruptcy trustee about referring work to his practice in return for a…
