As we reported here in May, the NY Attorney General filed suit against two debt consolidation firms in New York alleging fraudulent and deceptive business practices. Namely, the companies reportedly charge exorbitant consolidation fees while failing to ever eliminate any of the customer’s debt. The result for the customer is greater debt and a damaged credit score. Following up on this growing trend last night, ABC News attempted to get answers to the questions that many consumers would like to know. However, the VP of operations for Credit Solutation of America claimed to be ignorant on many issues.
Credit Solutions, one of the companies sued by the NY Attorney General, often promises to reduce your debt to up to 50% of what you currently owe and eliminate all debt in three years.
Based on these claims, ABC asked the VP of operations what percentage of clients pay Credit Solution’s fees (15% of the total debt) without actually having their debt settled by Credit Solutions. Her response: “That’s a great question. I don’t have that number, but I can certainly look at it for you.”
Similarly, when asked what percentage of customers make it all the way through the program, she replied: “I wish I had an answer for you. But that’s something I’d have to look up.”
Even the most straightforward question about the percentage of customers who have at least one debt settled for them, presumedly a question the marketing department for Credit Solutions has considered before, was met by further evasiveness. “Another great numbers question; I don’t have a specific answer to that.”
While more and more people are struggling with their debts in this difficult economy, debt consolidation companies have preyed on their vulnerability. Consumers should be aware of their options before seeking the assistance of such a company. For instance, many people are having success in reducing their debts by simply approaching their credit card companies directly and offering settlements. Further, sometimes banks are approaching debtors themselves offering settlements.
If you feel that you have fallen prey to the deceptive and unfair business practices of these or other debt settlement companies, please contact us immediately for a free consultation. Pogust Braslow & Millrood LLC will fight to protect your rights and those of all consumers being exploited by predatory companies like these.