Debt Settlement Agencies

by Cyndi Michalos Baker on February 6, 2012

How many times have you just sat down for dinner and the phone rings? You jump up to answer only to find it’s one of those annoying sales calls – how do they get your number anyway?  I was speaking with Meg Penstone, FCSS Manager of Credit and Debt Counselling the other day and she asked me if any of our clients had mentioned receiving cold calls from these so called Debt Counselling companies that we have been hearing on the radio lately.  Funny thing is ,we have begun to hear people talking about it.  Meg prepared an article about his topic for the Guelph Mercury in December and I asked her if I could share it here with you. So, with Meg’s permission here it is.  

Meg Penstone, FCSS Manager of Credit & Debt Counselling’s latest column in the Guelph Mercury–trust-your-instincts-on-telephone-pitches

Trust your instincts on telephone pitches

Christmas cheer, menorahs, sneezes, coughs and …. concerning calls? Apparently it is the season.

Within several weeks I have seen multiple clients losing thousands of dollars to “so called” debt counselling companies. Their creditors were never contacted. Some of these companies are not always acting in your best interest.

Ironically, I too, was personally contacted by a “debt settlement” agency and another company misrepresenting themselves as Microsoft, wanting access to my computer to “fix a virus.” Yes Virginia, there is karma.

They called someone who writes money management articles and manages a debt counselling unit at a long-standing, accredited agency. So I decided to play along (my friends tell me that I am very good at playing dumb).

I was given three options presented in a highly biased manner. I was encouraged to open up a new bank account and begin depositing funds.

What I know from my experience working in the debt counselling arena, is frequently the first several thousand dollars deposited are applied entirely to their fees, not your creditors (assuming your creditors are even contacted).

Furthermore, many major banks and creditors often refuse to work with many of these debt settlement companies. They will only work with accredited not-for-profit credit counselling agencies or licensed trustees. In addition, the information I was provided on credit rating implications was incorrect.

Most surprising and highly disturbing was how convincing, composed and polished these calls sounded. I can see how someone could get entangled. So how does one know?

Companies focusing on your best interest do not phone you and ask for bank account information or request access to your computer.

Be suspicious of anybody initiating contact and requesting personal access or information. Bricks and mortar can also be a cue.

A long-standing physical presence in a community warrants more confidence than a call centre that can be quickly established and dismantled. Contacting a government agency such as the Ministry of Consumer Services can help in determining services that will work in your best interest. And most of all, trust your instinct.

What we think of as our sixth sense is often an accumulation of experiences that our subconscious has processed. Pay attention to it.

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