Who to trust?

Scared,

The Debt settlement industry has, up to now, been correctly labeled as problematic by not only the BBB, but state and federal regulators and other consumer groups.

Due to debt settlement companies hostility toward the BBB, I would suggest you take virtually anything a debt settlement company has to say about the BBB letter grade with a grain of salt.

Instead of the letter grade, look at how many complaints have been filed with the BBB in the last 3 years on the company. Were they all resolved? If the company you are looking at has a high number of complaints, or many are unresolved, find a different company.

Due to recent federal rules having gone into effect in October, debt settlement companies can no longer charge up front fees (there are exceptions, but they are few). Many of the problem companies will disappear as a result and the industry will begin to regain a semblance of respectability (slowly). If you really want to hire a firm rather than do the settlements yourself, I would suggest looking to firms who charge fees after each of your debts are settled.

There are only a handful of debt settlement companies with an A BBB rating. Do a google search for them and you will find them. Be sure to verify the grade for any company direct with the BBB. Some companies will mislead about either accreditation or the grade they have, which of course would be a red flag for doing business with them.

it is time to do your very own research cause it will prove you never know who to believe

I'm not worried about whether I can trust the debt settlement company telling me what their grade is. I figured I could look that up on the BBB website to verify it. But after watching 20/20 and reading up online, I am worried about whether the BBB gave them the rating because they paid for it or because they earned it. How do I verify that?

Scared,

This is my opinion: If the company in question has been in business at least 3 years, the BBB has them correctly defined as offering to settle debt in their business description, and gives them a high letter grade - They either earned it or jumped through the hoops (tough criteria) to set their company apart from the rest of the industry.

Perhaps some additional measures for you to consider would be:

Do they charge a fee up front? Go with a company who does not.

Are the fees fair and competitive? There are lower cost providers that have been around for many years with good ratings and reputations.

Do they publish their client agreements online? Any company who does is embracing a new attitude in the industry for truth and transparency.

Good faith estimates are now required to be given to potential clients of a debt settlement company. They are not required in writing, but should be offered to you in writing by any company standing behind their past/present performance and should include:

How long the program will take from start to finish
How much it will cost in total for the settlements and the fees
How much funds you will have to have available before a settlement is offered to any of your creditors

Not having to pay a fee in advance of settling a debt puts you in the drivers seat. You will still have to be aware of the companies history and reputation, but more importantly, the business practices they use in their efforts.

My point is how do I know they actually "jumped through hoops" when it's looking like the BBB may not be a trustworthy source of information. Is there someone else that rates these companies without any money changing hands?

The BBB is not really designed to be a complete source of information. It is a dispute resolution mechanism between buyer and sell/service provider. The result of this basic function is a report that allows a single criteria for measuring a companies consumer complaint responses and the frequency with which they occur. What complicates this process for the debt settlement industry is that the whole industry has been designated as problematic.

There are a ton of places on the internet that rate companies in the industry, but nearly everyone is doing so to capture web traffic for competing firms so they can put a company in front of you that they recommend and get paid for, or where you fill in a form and they sell that as a lead to a company or who want to sell you something.

There are industry trade groups that cannot be trusted too.

It really will involve you researching and interviewing companies and making a decision after you have done so.

Trust yourself.

I filed a report against Midland Funding with the BBB about 2 weeks ago. Within 12 hours I had gotten a response that basically said that because of the nature of my complaint (about a collection/judgment matter) they were closing my complaint because that was outside their scope.

I wrote back and told them that if they don't investigate things like that then they need to stop misleading the public. Giving someone a good rating which ignores complaints based on what the company does makes their ratings in those cases worth less than nothing because they are misleading.

No one responded.

So do not trust the BBB either it seems at least in Debt Collections because they admit they don't get into that.