CONSUMER ADVISORY WARNING
For Potential Users Of
Credit Repair, Debt Management & Debt Settlement Companies
In conjunction with a weakening economy, many Americans are facing a record amount of
consumer debt and are searching for ways to repay their debt instead of filing for bankruptcy.
This situation has created an increased need for credit counseling companies who provide
adequate counseling with respect to client problems that includes an analysis of client’s current
financial situation, determination of what caused the financial problems and development of a
plan to remedy the financial crisis without incurring negative amortization of the client’s debt.
Historically, credit counseling agencies have been relatively small, community-based non-profit
organizations providing consumers with individual advice and assistance. However, due to the
increasing number of financially distressed individuals, several unscrupulous non-profit and for
profit companies are trying to take advantage of these consumers.
Therefore, the Mississippi Department Banking and Consumer Finance feels it is necessary to
issue a consumer advisory warning to Mississippians about the increasing number of scams
involving credit repair, debt settlement and debt management services. These scams typically
advise clients to stop paying creditors to correct credit repair problems, enroll all clients in debt
management plans without offering actual credit counseling, and claims of debt elimination for a
one time up front fee. Other characteristics of potential scams include the charging of excessive
fees upfront and not accurately disclosing fees charged. Most of these scams are from out of state
companies advertising via the internet, newspaper, television, flyers and signs posted in the state.
These companies usually do not have a physical presence in Mississippi.
Consumers who are trying to reduce or eliminate debt are working toward an admirable goal and
it is unconscionable to take advantage of these efforts.