JACKSON, Wyo. – A couple here received an official looking letter with what appeared to be a seal of the United States of America and a presorted firsts class postage meter.
“U.S. mail: The enclosed documents are intended solely for the addressee” made it even more official looking. The proposal was from a debt consolidation company,
but the play was the same, get the consumer to think it was an official government program. The couple was curious because in the fine print, it read: ”The 2010 U.S. Stimulus Plan provides U.S. citizen’s the ability to claim pending benefits set aside through this Benefits Resolution Plan. This certified notice acts as final opportunity to claim said benefits set to expire 2/24/2012.”
The couple was right to question the company and its legitimacy and whether or not they need to be involved with the company. BBB called and was told the company was Credit Card Education Services, and the letter was postmarked from Sacramento, Calif.
People should remember there are specific laws governing the debt elimination, consolidation and settlement industry in all states. Best check with the state’s attorney generals office to see if there are nay violations, and what the laws are.
Here’s what BBB offers:
Debt Negotiation/Settlement Debt negotiation companies claim that they will negotiate with a consumer’s lenders to lower the total amount of debt owed for an upfront fee. Unfortunately, some consumers who paid for debt negotiation services found out that the company never contacted their lenders. Instead, the firm took the consumers’ money and disappeared as a business. Another caution is for consumers to keep talking directly with their lenders and not succumb to the belief that debt negotiation companies have everything under control. Too often consumers end up slipping deeper into debt. Relying on debt negotiation firms could also put a dent in a consumer’s credit report.
Debt Consolidation Debt consolidation companies offer to group together various debts allowing the debtor to make one lower payment to the company, rather than many payments to the different lenders. While debt consolidation can make paying monthly bills more manageable, consumers should be aware that some companies tack on high fees and charge exorbitant interest rates. These mean the consumer is paying much more in the long run for the convenience of a single, reduced monthly payment.
Debt Elimination Companies that offer debt elimination rely on many different schemes, but they all hinge on the notion that credit lines are illegal. Debt elimination companies typically provide, for an upfront fee, a document for the lender that supposedly absolves the consumer of the debt. Unfortunately, the document has no bearing whatsoever on the debt owed and consumers paying for such services have found that they’ve wasted money on a debt elimination scheme that would have been better spent on actually paying back their debts.
