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FTC ends two debt relief scams

The FTC has successfully shut down two debt relief services, one of which was operated by two Florida men. Both operations are unrelated but used the tactic of cold-calling individuals and offering to lower their credit card payments and rates. The fee for their fraudulent debt relief was as high as $1,200.

The two Florida men used a robo caller and when they were contacted by consumers, promised to save them thousands of dollars. In return, some customers got a packet of information that contained a budget and basically explained that making more than minimum payment would pay off the debt faster and save money. Another group used a call center in India that used abusive practices to collect pay-day loans. Some of the consumers didn't have pay-day loans and others were actually owned by other companies. They managed to process more than $5 million in payments from customers they misled.

The defendants in both cases have been ordered to pay a combined $34.9 million in stolen funds. The members of the organizations have also been banned from working for credit relief or debt services. The FTC is limited to civil actions, so criminal charges will require an investigation by police.

There are potentially many people who are willing to make promises they can't keep about reducing or eliminating a consumer's debt. If an individual wishes to explore options to legitimately lower interest and payments on his or her credit cards, it may be helpful to consult with a bankruptcy attorney. An attorney may be able to negotiate with the credit card companies on the consumer's behalf or point the consumer toward a reputable company that can help.

Source: Main Street, " FTC Shuts Down Two Scammers", Eric Reed, September 13, 2013

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