Is your debt situation is becoming too difficult to manage on your own? You may want to consider seeking the services of a Debt Consolidation Agency. However, you should use caution when choosing these services.

Many businesses offering debt consolidation charge extremely high fees, fail to follow through on their services, misrepresent the terms of their service, or neglect to disclose certain costs or explain the complete terms of the agreement.

Before you sign up, use the following questions to help review each company, the services they offer, and the terms of the agreement you may be entering in to. Compare several companies before choosing to do business with any organization.

Questions to Ask:

• Did the seller, ad or telemarketer guarantee that you would receive a line of credit or loan? Is advanced payment required? Proceed with caution. A legitimate lender will never "guarantee" you will receive a loan or credit card before you apply, especially if you have bad credit, or a bankruptcy in your past.
• Did the telemarketer selling the service ask for a credit card number, bank account information, or Social Security number from you over the telephone? This is a red flag! Unless you are familiar with the company and know why the information is necessary, never give out this information.
• Did you find the advertisement for this company in a newspaper or magazine's classified ad section, or in a mailing, radio spot, or on a local cable station? These companies often represent scams, or may require that you call costly "900" numbers to learn more about their services.
• Does the company use overnight or courier services to deliver their product, rather than the U.S. Postal Service? This may be an attempt to escape detection and prosecution by postal authorities.
• Does the company require an advance fee or applicaiton fee, but does not offer a "guarantee" of receiving a loan or line of credit? It is a common and acceptable practice for legitimate lenders to charge fees to pay for a credit report or appraisal. You may also have to pay an application or processing fee.
• Does the credit offer require your verbal or written acceptance of the loan or credit offer? Is the application subject to a credit check to make sure you meet their credit standards? Is the application fee small? These are usually good signs of a reputable loan or credit offer.

There are an ever-increasing number of debt agencies offering too-good-to-be-true solutions to your financial problems. But remember, if it sounds too good to be true, it probably is!

See our article "How to Choose the Right Financial Service" for more helpful suggestions.

Visit the Federal Trade Commision's site at www.ftc.gov for additional information regarding financial services.