How to avoid payday loan consolidation scams
There are several consolidation scams which are taking advantage of people who might not know what they are up to. It is bad enough that you may be in debt. It would be worse to sink further in debt and lose your money to such scams. So, what can you do to avoid consolidation scams? The following are some helpful tips which may be useful to you:
Do extensive research
When seeking options on how to get out of debts, you need to do thorough research on the firms that offer such services. The Better Business Bureau (BBB) can offer you information on the consolidation firms that you may be considering.
The information may include historical records of the company, complaints that have been made against it and how they were handled as well as violations the company may have committed. Such information goes a long way into ensuring that the firm you approach has a good standing and can be trusted.
Ensure that payday consolidation companies are licensed and registered
In most cases, consolidation scams operate without the required legal licenses and are not registered. Should you come across such consolidators, be wary of them and do not use their services. This is because should anything happen, there is no accountability or law that will be able to protect you and ensure that your rights are adhered to.
Be familiar with the terms of the lender
It has been found that most consolidation scams take advantage of borrowers by capitalizing on the fact that they may not have scrutinized the terms of the contract before signing it. Therefore, you should check for any terms which may imply that some actions resulting in severe consequences can be taken against you should you fail to honor a specific duty. To avoid getting ripped off, also familiarize yourself with the laws in your state.
Contact the company directly
A good consolidation company is one which you can have constant and open communication with. This gives you a sense of confidence as you can know the progress of your repayments and there is a point of contact should you need any assistance or clarification.
Avoid consolidation companies that do not offer a contact person who can have a face-to-face meeting with you or one that does not even have a website or a physical office that you may visit. Companies without a physical office, reliable contact personnel or telephone numbers are probably scams that will vanish with people’s money.
Avoid the payday loan consolidation company which tends to increase your debt
Should you find a consolidation company that is constantly asking for your money, be wary of it because this is probably a scam. Such requests are not usually made.
A legitimate consolidation company shares the same goal as you – to reduce the debt you owe. There is a cause for worry if you are not given the following information: by how much the company can reduce your debt, the fee they charge and the time frame which they expect you to settle your debts.
We hope the above tips will help you in your journey. Good luck!