American Companies Offering Debt Settlement Services
However, in October of 2010 Canada was introduced to a sensational new way of settling credit card debt that “could work for anyone”–or so the advertisements claimed. All you have to do is stop paying your creditors, save up your own money and then have an “expert negotiator” work out a settlement for you. Unfortunately, this method doesn’t really work–even though American debt settlement companies spend millions of dollars advertising that it does work.
After fielding thousands of complaints from angry US consumers and thoroughly investigating the matter, the US government enacted legislation in October 2010 to prevent for-profit US debt settlement companies from charging people fees for debt settlement services before providing a debt settlement service.
These American for-profit companies were charging people many different types of fees on a monthly basis for a service that 65% of their clients never received. The US Federal Trade Commission went on to discover that less than 10% of the people who signed up for these for-profit settlement programs successfully completed them, and rather than save their clients money as they so heavily advertise, they often cost many of their clients two to three times the amount of the debts that they settled. This is because it takes so long to save for a settlement that credit card interest, late fees and penalties often doubled or tripled the debt by the time it was settled.
Why Talk to Creditors?
When you’re in debt, your creditors can help you. But communicating with them effectively is key.
Debt Settlement Dangers
Working with a for-profit debt settlement company can cost you. Here’s what to watch out for.
Debt Settlement Scams
If something sounds too good to be true it usually is. Here’s how to spot a debt settlement scam.