Credit Counseling - How Can I Tell If a Credit Counseling Agency is Overcharging?
Right from the onset let's be clear on this fact; a Credit Counseling Agency can set their fees and commissions to whatever they like.
But, you don't have to sign an agreement to do business with them.
If you checkout the fees and they are not in line with what you have learned here, just thank them for their time and consideration and politely walk away.
I Changed My Mind...
Can I Cancel This Contract? - The first Rule of Thumb when dealing with a Credit Counseling Agency is this; in the contract, there MUST right to cancel provision, (Also known as a right to rescind and a cooling-off period.
) If they don't provide one, move on! Period and end of discussion! The right to cancel allows you the time to go over the contract in detail.
Or maybe there were some changes in your finances that prompted your desire to cancel.
Whatever the case may be, if you don't have that option, any company can take your money and run; and they do it often.
You should be given at least three business days, preferably seven.
And, there should be detailed instructions for you to follow to initiate the cancellation.
These instructions should be something simple, such as logging on to their website and obtaining a confirmation of cancellation.
Or calling and receiving a cancellation confirmation number over the phone.
If you have send a form by certified mail, write a thesis or contact your legislature, forget that Credit Counseling Agency and move on.
Credit Counseling Agencies that don't provide a right to cancel provision can take advantage of it clients.
An honest company that operates in integrity will provide this option, IN WRITING! I Heard What You Said and It Sounds Good...
Why Can't You Put It In Writing? - The second rule of thumb is this; they should clearly describe the services they are going to provide in writing.
They should be able to show you in writing how long it will take to get results.
They should be able to show you the cost of their services.
If they can't provide these things, in writing - you are setting yourself up to be overcharged! Here are some industry standard price guidelines acquired from Non-Profit Credit Counseling Agencies.
Initial Consultation Fee $50.
00 to $70.
00 Plan Enrollment Fee $30.
00 to $50.
00 Monthly Maintenance Fee $30.
00 to $40.
00 Reinstatement Fee $15.
00 to 25.
00 When you start seeing fees higher than those and fees with odd names such as processing fees, activation fees, management fees and negotiator's fees, watch out - you are being overcharged.
It is a known fact that For-Profit Agencies easily charge fees and commissions in the twenty percent range and up.
Let's do the math.
If the payment they worked out for you came to $820.
00 per month, their fee at 20% would be $164.
00 per month.
That means you would need to deposit to the agency a total of $984.
00 per month.
To me, that's highway robbery.
That $164.
00 should be going towards reducing your debt, not paying someone's note on his or her tricked out H2 Hummer.
But, you don't have to sign an agreement to do business with them.
If you checkout the fees and they are not in line with what you have learned here, just thank them for their time and consideration and politely walk away.
I Changed My Mind...
Can I Cancel This Contract? - The first Rule of Thumb when dealing with a Credit Counseling Agency is this; in the contract, there MUST right to cancel provision, (Also known as a right to rescind and a cooling-off period.
) If they don't provide one, move on! Period and end of discussion! The right to cancel allows you the time to go over the contract in detail.
Or maybe there were some changes in your finances that prompted your desire to cancel.
Whatever the case may be, if you don't have that option, any company can take your money and run; and they do it often.
You should be given at least three business days, preferably seven.
And, there should be detailed instructions for you to follow to initiate the cancellation.
These instructions should be something simple, such as logging on to their website and obtaining a confirmation of cancellation.
Or calling and receiving a cancellation confirmation number over the phone.
If you have send a form by certified mail, write a thesis or contact your legislature, forget that Credit Counseling Agency and move on.
Credit Counseling Agencies that don't provide a right to cancel provision can take advantage of it clients.
An honest company that operates in integrity will provide this option, IN WRITING! I Heard What You Said and It Sounds Good...
Why Can't You Put It In Writing? - The second rule of thumb is this; they should clearly describe the services they are going to provide in writing.
They should be able to show you in writing how long it will take to get results.
They should be able to show you the cost of their services.
If they can't provide these things, in writing - you are setting yourself up to be overcharged! Here are some industry standard price guidelines acquired from Non-Profit Credit Counseling Agencies.
Initial Consultation Fee $50.
00 to $70.
00 Plan Enrollment Fee $30.
00 to $50.
00 Monthly Maintenance Fee $30.
00 to $40.
00 Reinstatement Fee $15.
00 to 25.
00 When you start seeing fees higher than those and fees with odd names such as processing fees, activation fees, management fees and negotiator's fees, watch out - you are being overcharged.
It is a known fact that For-Profit Agencies easily charge fees and commissions in the twenty percent range and up.
Let's do the math.
If the payment they worked out for you came to $820.
00 per month, their fee at 20% would be $164.
00 per month.
That means you would need to deposit to the agency a total of $984.
00 per month.
To me, that's highway robbery.
That $164.
00 should be going towards reducing your debt, not paying someone's note on his or her tricked out H2 Hummer.
Source...