If you’re searching the Internet for debt solutions or a debt management program, there are a lot of good options, but also a concerning number of scammers. These criminals see you as prey, knowing you’re in a vulnerable situation.
It’s up to you to educate yourself on the signs that you’re dealing with a scammer.
10 Red Flags of an Online Debt Management Scam
Unfortunately, anyone can offer you their time and promise to solve your debt issues. Financial consulting is a hard industry to regulate, and therefore there is little proof to hold coaches accountable.
A good financial coach saves you both time and money, as they will guide and teach you better financial habits. A bad financial “professional” will take your money and personal information, while providing no solution, and may leave in you a worse situation.
Federal regulators are trying to keep up with the amount of financial scammers out there, but technology has made it too easy and anonymous to carry out financial scams. There are simply more criminals out there than law enforcement can handle.
Things to Watch Out For
If you run across any of these when searching for a financial consultant or debt management solution, walk away!
They Make You Sign a Contract
You should not have to sign a contract to receive debt consolidation services or any type of financial coaching, especially one that is for the long term.
They Bundle Services and Make You Pay in Advance
They ask you for a chunk of money upfront, calling it a bundle or ask you to pay for several months of services.
They Have Complex Pricing Structures
The pricing should be straightforward and transparent. If they have a lot of add-ons, extras, fees for a sliding scale, or anything else that seems fishy, they may have hidden costs that are hard to detect.
They Recommend You File for Bankruptcy
There are some reputable debt counselors who will advise you to file for bankruptcy in certain dire situations, but this is a big red flag. If bankruptcy seems to be their go-to solution, and they work to convince you that’s the best path forward, watch out.
They Push for Specific Financial Products or Services
A good financial coach will have no incentive to steer you to any specific product or service. If their “help” is a sales pitch to buy something, be wary.
They Charge Too Much or Too Little
If their price to get you out of debt seems way too high, that’s a red flag that their interest in working with you is the payment, and may be more interested in their own revenue than helping you. If their price is too low – almost too good to be true – their interest may be to collect your personal information for nefarious purposes. They may simply take your sensitive financial information and disappear.
They Request Your Sensitive Information
A reputable financial coach will advise you on what financial moves to make – actions you do on your own – and has no need or desire to gather your sensitive information.
They Fix Your Credit Score Through Negotiations
This is unlikely to work, and even if it does, it will be a short-term solution. Creditors may remove a debt that’s in dispute, which may raise your credit score. What tends to happen is, the creditor later determines that the debt is valid and will put it back in your report, lowering your score.
They Say They’ll Eliminate Your Debt Through Negotiations
Really? Why would a creditor eliminate your debt? What is the debt counselor offering them through this negotiation? There may be situations where the creditor will reduce the amount owed for a lump sum payment right now, but they’re not going to just wipe away the debt because some debt relief person called them up. Huge red flag!
They Pressure You with Limited-Time Offers
A creditor may offer to reduce your balance owed if you pay it all within a short timeframe, but if a financial counselor makes a limited-time offer for their services, be very wary. Limited-time offers from debt management services are generally pressure tactics to get you to agree to work with them before you have the opportunity to do your research.
Good Questions to Ask a Financial Coach
Seeking debt relief or money management solutions should be with a financial coach who is reputable and has your best interest in mind. Do not hesitate to vet them. Ask the right questions and make sure you’re comfortable with their answers. If your gut tells you something isn’t right, move on to another option.
What are your qualifications?
Anyone can call themselves a financial coach. There are no licensing or regulations to hold anyone accountable. What would make them qualified is a background in personal finance or money management or a solid history of successfully helping people reach their financial goals.
Are you a member of any professional organizations?
It’s important to look for a financial coach with experience and who has been a part of professional associations for years. Karl Kulpak, owner of Money Coach Group, has been a State Trooper for over 10 years. He upholds the law when he’s not helping people become debt free. Karl has been studying personal finance for the better part of a decade and is part of three professional memberships that support business, financial freedom, and mind/body health.
What will your services cost?
There should be a definite answer to this question. Reputable financial coaches have transparent fees that make sense. Money Coach charges a simple $197 per month, with no contract, and a goal to get you debt free as quickly as possible. What you save on interest will more than pay for the coaching.
Will I be working with you or will I be assigned to someone else?
A financial coach should build a trusting relationship. If the person you’re speaking to on the phone isn’t the person who will be your financial coach, ask to speak to the person you’ll actually be working with before you commit. With Money Coach, you’ll speak with Karl Kulpak, the owner, you’ll work directly with him.
Can I get a free consultation to get started?
Your initial consultation should always be free. That session should involve more than a sales pitch from the financial coach. It should be a discussion about your situation and what the financial coach can do to help. This is where you determine if this will be a good fit for you.
Do I have to sign a contract?
The answer should be no.
How soon will I be out of debt if I use your services?
The financial coach should have some parameters for this. Obviously, it’s different for each person and situation, but a good debt counselor should have a reasonable idea based on the info you give them.
Do Your Research!
Before you even contact a debt relief agency, research them online. Read through their website. Check their reviews. See if there have been complaints. When you call them, ask our recommended questions and ask yourself whether you feel comfortable with them or not.
When you contact Money Coach, you’ll be talking to Karl Kulpak, the owner. He’s passionate about teaching people the skills they need to manage their money and experience real financial freedom. Call or text Karl at (302) 339-1296 or email [email protected].
Eliminating debt can seem impossible and overwhelming, but you don’t have to feel alone and helpless in this journey.
Money Coach provides caring and qualified help to get you out of debt and on your way to financial freedom. Give us a call for a free consultation at 302-339-1296.