Two fraudulent debt relief service companies, including one based in Florida, have been shut down by the Federal Trade Commission after it was determined that they duped unsuspecting consumers into paying for debt relief services that were never provided. The companies knew that certain consumers who were being harassed by collections agents or debt collectors and would be especially vulnerable to the promise of reduced debt and elimination of harassing debt collection practices.
While the companies are unrelated, their tactics were surprisingly similar. Representatives of the company would cold call consumers and promise the consumer that if they paid for debt relief services, the company could reduce the interest rate or amount owed on the consumer’s outstanding debt. Consumers paid hundreds, if not thousands, of dollars to get no advice or assistance. These companies did not have certified credit consultants, nor did they provide any real credit counseling services.
The Florida-based company also ran a fraudulent debt collection scam. In this scam, the company would harass consumers into paying back a specific payday loan. In many instances, the consumers did not have a payday loan. In other instances, the consumers had payday loans, but the loans were with other companies. As a result of the FTC’s findings, the companies are required to return all of the stolen funds and are prohibited from working in credit or debt related fields in the future.
Individuals that are in debt and are having difficulty repaying that debt are under a great deal of stress. There will always be individuals who try to take advantage of these consumers for their own financial benefit. In this situation, an attorney may be able to help consumers with their debt burden. An attorney may be able to negotiate with creditors or, if necessary, help consumers through the bankruptcy process.
Source: Main Street, “FTC Shuts Down Two Scammers“, Eric Reed, September 13, 2013