Bill Consolidation Fraud

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Bill consolidation fraud represent several scams involved in the bill consolidation process. Bill consolidation is a strategy applied by borrowers to repay outstanding balances. It combines all the existing loans of a borrower into one single loan, thereby making repayment convenient. But bill consolidation fraud may sometimes make the financial situation of a borrower worse than ever.

One of the most common examples of bill consolidation fraud is a debt consolidation company that pretends to be nonprofit. Such companies promise to clear a borrower's debts for a nominal charge and then later charge a sizable fee. It is, therefore, advisable not to sign any contract with such firms. Sometimes, a borrower's equity is stolen through bill consolidation fraud. In this case, a lender or a mortgage agent contacts the borrower and promises to combine all his debts into a single repayable loan. Later, in order to yield huge profits, he compels the person to borrow further. This may sometimes pave the way for a loss of property on the part of the borrower.

Another example of bill consolidation fraud is a firm that promises free debt consolidation that is not actually free. Bill consolidation fraud also appears through a plethora of media sources. Other methods of bill consolidation fraud include phone solicitations, print fraud, and online fraud. In the case of phone solicitations, scammers contact borrowers and ask for account-related and personal information. Print fraud utilizes local newspapers and magazines to publish fake advertisements, coming up with special rates and offers for bill consolidation. Online fraud occurs in the form of fraudulent e-mail. Sometimes, scammers use logos and images of legitimate companies to get information about the borrower's account.

The primary step in avoiding bill consolidation fraud is the selection of a reputable bill consolidation service provider. Proper research should be undertaken regarding such matters; useful information including the duration a particular firm has been in business, the strategy it applies to clear debts, and probable complaints against the company filed with the Better Business Bureau (BBB) ​​or the State Attorney General's office.

Organizations such as the American Association of Debt Management Organizations, the Consumer Federation of America, the International Organization for Standardization, and the National Consumer Law Center (NCLC) also help borrowers avoid bill consolidation fraud.

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Source by Richard Romando

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