Credit counselors and the fine art of cheating customers
Tired of looking for places to hide everytime your telephone rings? You know it’s one of your creditors calling to try to collect a payment that you don’t have. If this scenario sounds familiar, it is possibly time to check your options. However, be warned, many people have complained that after seeking help from credit counselors, they found themselves worse off.
Last year, 1,286 complaints were filed with the watchdog U.S. Better Business Bureau against credit and debt counselors. A few months back, IRS audits revealed that some of the nation’s largest edcuational credit counseling services existed mainly to prey on debt-ridden customers. To stop this exploitation, the IRS has canceled the tax-exempt status that it granted these services. Zwire.com reports:
IRS Commissioner Mark Everson said organizations looking to make a profit take advantage of consumers by securing tax-exempt status and making cold calls to people in desperate financial straits. They use scare tactics to sell the people "cookie-cutter" debt management plans that often are not geared toward reducing the consumer’s debt, and are too costly to pay.
Read more: Cracking down on credit counselors