Debts & Loans

When you are in a financial crunch worrying about how to pay the mortgage, college tuition, credit cards and other bills, even the most dubious offers to ease your debt load can sound appealing.

That helps explain why so many consumers agree to pay hefty fees to debt-settlement companies that promise to erase their debts for about a third of what they owe.

Few people realize that they can do a lot of this stuff themselves without padding the pockets of debt collectors.

Apparently, even fewer people realize that many of these offers are outright scams.

There have been a number of reports detailing the perils of such agreements.

The Federal Trade Commission recently charged four companies with deceptively marketing a debt settlement operation that allegedly failed to provide services to reduce consumers’ debt. According to the FTC, the companies offered debt relief programs through the Web sites idebthelp.com, moneycares.com, edgesolutions.com and ontrackmpower.com.

In many cases, the consumer ended up owing more money from late charges and legal fees. Some had their wages garnisheed or had to deal with other collection agency action because the company never contacted the creditors.

There are safer and surer ways of dealing with your debt.

One is calling the creditor directly. Today they are more willing than ever to work with you, Arnold said, adding that credit card companies’ outreach to members now is unprecedented.