Consumer Information

The Signature of a Trustworthy Debt Settlement Company

By TASC staff and members

For many consumers, sorting through the numerous variations of settlement and negotiation services offered by literally hundreds of companies nationwide can sometimes be a challenge. While there are many reputable companies offering legitimate settlement services, there are areas you should consider when choosing a company that’s best for you. To help you in your search, the following questions are excellent guides to keep in mind when evaluating a trustworthy company, who can provide the best help for your particular situation.

Company Credentials

Are they a member of a national industry trade association or other accreditation agency?

This is one of the most important items to consider when choosing a company to work on your behalf. Many settlement companies today operate independently and without a system of checks and balances. Since many states have few requirements for settlement companies to follow, be certain to look for a company who holds themselves accountable to industry standards maintained through an industry accreditation process.

Insurance and Bonds

Is the company insured and bonded?

Since debt negotiation clients will be sharing sensitive information including creditor account and social security numbers it is strongly recommended the debt settlement company be bonded and insured against identity and financial theft.

Holding Accounts

Does the debt settlement company hold client settlement monies?

Debt settlement companies should never offer to hold your money in a trust account controlled by the company. Instead, the monies saved for future negotiation should either be in the consumer’s own private savings account or in a third party bank FDIC insured account. You should always maintain direct control of the money

Contracts

Does the contract include the required disclosures and is the total amount to be paid as specified in the contract less than the amount of debt enrolled into the program?

Debt settlement companies are required to deliver a written contract describing the services they will perform and a best estimate of costs. The contract should be easy to read, include the disclosures mentioned later in this document and you (the client) should never be required to pay more than 100% of what you owed which includes the fees to the company.

Customer Service

What can you tell me about the quality of your customer service?

The settlement process can take between two to four years to be completed. This is a trying period for the consumer faced with aggressive creditors. A solid relationship with clear communications directly with the company is instrumental to completing the program successfully and stress free. Ask about customer service training, hours of operation and any affiliation or awards the company might have earned.

Access to your Account

How does the company let me know about the status of my account?

Legitimate Debt Settlement companies should have an online “client center” so current clients can view their account information at any time or be sent monthly statements on a timely basis.

Full Service Company

Why should I contract with your company?

There are many debt negotiation business models but the company should have some affiliation in the city they reside in either through the chamber of commerce or any other professional organization.

Creditor Management

What to you do to help with aggressive creditors?

Debt Negotiation clients are likely to experience aggressive creditors using threatening collections tactics. Consumers should require that either the creditors be notified through a “ceased and desist” letter or that a creditor harassment service be included with their debt settlement program.

Consumer Education

Do you provide any educational services or materials?

Debt Negotiation is not just about saving money and becoming debt free. It is about learning proper financial management so that the consumer is not faced with the same financial situation in the future. Debt Settlement Companies should be offering financial education services either through online education, print or in class training.