Subscribe to this BlogTargeting companies that target consumers in debt
Eliminate your debt forever! Stop harassing phone calls! Talk radio, late night TV and the Internet are littered with ads that promise a quick and easy way to get out from under a mountain of debt. These commercials by so-called debt settlement companies say they can help you reduce your debt as much as 75% by negotiating with your creditors. What the misleading ads don’t make clear is that you have to pay the debt settlement company a hefty fee upfront and their advice usually consists of bad moves such as stopping payments to your creditors and closing down your credit accounts, which immediately damages your credit score. The debt settlement companies keep their fee even if they don’t deliver on the promised services, which is pretty often judging by the huge number of complaints about these firms. According to the non-profit National Foundation for Credit Counseling, consumers who turn to debt settlement firms end up worse off than before, deeper in debt and with lower credit scores than when they first tried to tackle their money problems.
Fortunately for consumers, state regulators in New York and Texas think that debt settlement companies are a big problem for consumers too. Last week, New York Attorney General Cuomo announced a nationwide investigation into the debt settlement industry. Calling it a “rogue industry", Cuomo issued subpoenas to 14 debt settlement companies seeking information on their business practices and called for any consumer who believes he or she has been defrauded by a debt settlement company to contact his office at 800-771-7755 or www.oag.state.ny.us. In March, Texas Attorney General Greg Abbott sued Richardson, Texas-based Credit Solutions of America accusing it of defrauding Texans by failing to negotiate settlements with its customers' creditors. Texans who have a complaint can call (800) 252-8011 or go on online at the Texas Attorney General's Office.
It’s understandable that if you’re saddled with debt and can’t pay your bills, you want to believe there’s a quick way out. But speaking directly to your lender to work out a payment plan or working with a good credit counselor who can help you do that is much more effective than going to a debt settlement company and shouldn’t cost you anything. There are scammers posing as credit counselors too though, so be sure to only work with a credit counselor who has been vetted by the National Foundation for Credit Counseling.
As for long-term solutions, it's criminal that these firms are allowed to advertise these kind of services in the first place. One of the most effective moves that regulators could make would be to have the Federal Trade Commission crack down on the advertising practices of these firms and impose stiff financial and criminal penalties for violations. The recession is hurting a lot of people but trying to profit off of people already in dire financial straits is just plain wrong.
- Donna Rosato
Just like everything else in life, there are some people that want to take advantage of others — they are slime. My friend got burnt by a company that operated out of California. After sending them some money he never heard back from then. I heard about "Get Out of Debt Online" on a radio talk show in NYC and I checked them out. They are certified with Better Business Bureau and they checkout to be legitimate. I am now enrolled in their debt settlement program and will be debt free 15 months from now (Yeah!!! I haven't been debt free since high school). Check them out at Get out of debt online
Debt settlement is the right choice for SOME consumers. Debt Consolidation is the right choice for SOME individuals. Bankruptcy is the right choice for SOME individuals.
The first thing that caught my attention was the comment made below: I got scammed by a so called debt settlement company….Then, it goes on to mention that a reputable company was found by the name of e-debtexpert. Did this company get your money back from the scammers?
There are bad actors in every industry. Karma will catch up with those individuals.
I got scammed by a so called "debt settlement company" about 6 months ago. It was a horrible experience and led me to even higher levels of stress than I was already under due to my credit card debt,which was over $10k. I like that state regulators in NY/TX are trying to get a handle on these phonies! Hopefully more states will follow in their footsteps (like mine, SC!)
Lucky for me I found a credit card debt settlement service that actually WORKS and that is REPUTABLE. The company's name is "e-debt Expert". You can check them out right here:
http://e-debtexpert.com/
A friend of mine used them and recommended them to me. They helped me slash my monthly payments AND debt by nearly 40%! If you're in credit card debt and are searching for some help like I was, please contact them to get you on your way!
They should also target those Junk Debt Buyers (JDB's) who purchase debt from the original creditor for pennies on the dollar and then use scare tactics and inappropriate methods to get "THEIR" money. These are bottom feeder companies that prey on folks who are not educated in the Fair Debt Collections Practices Act (FDCPA).
Of course there are consequences for settling your debt for much less than you owe. Those are options that people must weigh for themselves. It is only wrong if they are unaware of what they are getting themselves into.
Get rid of your debt, sacrifice your credit. Or, you can keep your debt and stay just above water by making the minimum payments for 20 years. Hopefully you don't do either. If you have to choose then make an educated decision.
The government has better things to do, like wasting our tax dollars.
Working with a creditor HAHA good one. Credit Counseling??? If I cannot make my payments now how can I afford to make the full payment to a credit counselor. At least with debt settlement the monthly payment is lower and if it does not work exactly as planned then I have to go to bk which is what I would have had to do anyway. But I think I would rather try the 3 year plan and take a big ding on my credit than immediately ignore it as an option and had a bk on my cr for the next 13 years. Why make settlement go away just regulate the fees. consumers who turn to
"debt settlement firms end up worse off than before, deeper in debt and with lower credit scores than when they first tried to tackle their money problems."
Isnt that what happens when you cant make your min payments. Did the debt settlement company do that or did I do that because I could no longer afford to pay my bills. Lets own the blame America. Do we expect them to preform a miracle? Getting out of debt is not pretty. If you do not follow through with DS or CC or any other debt program you will end up like this.