Perhaps some are. But when NetDebt charges “15% of the amount of debt you bring to their program (regardless of results or the number of creditors it must deal with), plus a “small” monthly service fee of $50,” I have to wonder.
So if a consumer had $20,000 in debt, he or she would owe $3,000, paid over no more than 15 months, plus $50 per month. And what do they do for this? Call up the creditor, get their best offer, and collect payments from the consumer. So $250 just for the service, not counting paying off the debt.
Does this take an attorney? No. Can’t consumers do this for themselves? You bet. As TransUnion website TrueCredit.com notes,
Everything that an agency can do, you have the power to do on your own. You can reduce your debts, negotiate settlements and improve your credit score from the comfort of your own home. Plus, with do-it-yourself credit improvement, all your money goes directly to the debts and you can avoid the practices that damage your credit.
And that $250 per month would go a long way towards paying off debt.
doubts over debt negotiation fees | f/k/a (via Consumer Law & Policy)
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Not only that but doesn’t the “best offer” mean settling, which negatively affects your credit score? Though I suppose if you are going to this collection agency, settling is probably the least bad option.