The consumer debt counseling industry is essentially an unregulated beast in the United States. Why? With thousands of these types of businesses popping up all over town, it's hard to keep track of them all. While change doesn't appear to be on the horizon, there are a few things you can do to make sure you don't get taken by someone pretending to help you, leaving you worse off than when you started.
Generally, any company that advertises on television or contacts you directly should raise a red flag that something might not be 100% right. Most reputable debt counseling services don't work that way. It should be obvious, but avoid those companies that send you any type of SPAM, whether they be email or text messages. They are almost assuredly scams and can leave your personal information vulnerable.
Try to find a debt counseling agency that is a member of the National Foundation of Credit Counseling (NFCC). They have been in the industry for more than fifty years and have very strict guidelines for member companies.
Don't add any weight to a company that claims to be a nonprofit. While being a nonprofit sounds nice, it doesn't guarantee better service or reputability.
Never give your financial information to anyone over the phone, especially if you didn't solicit the call. Doing so can open you to a host of problems if the company is not reputable. Always deal with a person face-to-face.
Of course, if it sounds too good to be true, it is. The same goes for companies that claim that they can completely wipe out your debt and start you anew. While that in itself would be very nice, in reality it doesn't happen. Otherwise, wouldn't everyone be doing it?
Lastly, there has been some confusion about fees charged by these companies. Any good reputable debt counseling company doesn't charge as much as you might think. They don't keep the first month's payment, take percentages, or solicit contributions. The average fee for a reputable company is around $20. Never pay any fees upfront.