Buyer Beware – Debt Consolidation Scams
May 30, 2008 | industry, personal finance | Comments (0)The UK’s Guardian reports that consumers in Great Britain are increasingly being targeted by firms claiming to offer credit help. These firms are offering expensive “debt solutions” that are actually turning a profitable dime for the companies.
An unprecedented number of firms are targeting people in debt by claiming to offer free ‘advice’ on their money worries, say debt charities.
The Bankruptcy Advisory Service, a genuinely independent debt advice service, says it is seeing the ‘sharks’ emerging at a rate of about 10 a week. ‘A lot are internet based and claim to offer people help with their money worries, when in fact they are pushing them into inappropriate and expensive debt solutions,’ said Joanne McGillan of the BAS.
So goes the adage: All that glitters is not gold. These problems in the UK seem just as likely to appear in the US. That’s why it makes no sense to me that legislatures are attempting to shutdown what is truly a sensbile option for some people. Payday lending stores operate under a simple straightforward fee based system that is easy for the consumer to understand. They even display in large print APRs - a measurement that really shouldn’t be applied to these sorts of loans.
At the very end, the article seems to imply that all payday lending is bad. It jumbles online lenders with regulated and unregulated and US and foreign companies. But the bottom line seems to me to be that people should have clear and honest choices.
… And we shouldn’t automatically trust everyone that purports to want to help. In reality – they can be the real sharks.
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