Nonprofit Debt Relief Companies - Are They Real?

In the recent years, there has been a cancer-like growth in companies masquerading as nonprofit agencies which could assist you to manage your funds. However the truth is that the vast majority are con artists who betray your trust. There are many consumers who have fallen prey to them and found themselves in a deeper financial whole than before starting their investigation for financial assistance. The Federal Trade Commission has slapped fines on many of these companies and shut down a number of them. Cunning to the end, some even open shop under different names, so you always must be vigilant when looking for financial assistance.

And No Fees? Come On...

Financial organizations are run on profit basis. If they aren't, then their corporate structure would collapse. Why would any organization - especially a financial organization - work for free or charity? These illegitimate companies prefer a large share of your money in exchange for their "services" to you. When you make payments to them for assisting with your debt, the fly-by-night operators simply vanish with your hard earned money.

No Positive Credit Rating Impact

No company itself could improve your credit rating. Only when you pay back and clear your debts would your ensuing credit rating improve. So do not be fooled by scams when they tell you that they could improve your credit scores. Additionally, they also employ psychological tactics to influence you into working with them. For example, they may offer fake scenarios indicating that by not following their advice, you may face bankruptcy. This just isn't true. You have many options before facing a last-ditch bankruptcy situation.

In Return They prefer What?

Some of these scams may request that you make voluntary contributions, or rather ask for fees at specific intervals. They would not be using this money to pay back your creditors, but instead to fund their profitable companies. Be really aware of these tactics. There are way too many customers who have been hoodwinked, forking out large sums of money in return for ultimately little more than heartache.

Example of a Fraudulent Company

Early in 2005, the FTC filed a complaint against the National Consumer Council, a front line group of debt relief and negotiation companies, for deceiving roughly 45,000 customers seeking freedom from debt. Under the NCC umbrella were other companies with impressive names like London Financial Group and Financial Rescue Services. They falsely claimed that their clients' debt problems would be solved simply by depositing money into their accounts to benefit from their services. It simply was not so, and they were thankfully caught.