Story of a South Florida Debt Settlement Company

You can hear it all over the TV and Radio. "Save 60% of what you owe on your high interest rate credit cards!" These companies are referring to their debt settlement program.





How it works in a nutshell is that they pay your creditor less then what you owe once they come to a settlement agreement. The whole time you are making payments into an escrow account-NOT to your creditors.





You can see how there is a lot of room for problems here.





Booming Industries come in waves. There was a massive Mortgage Broker phase which slowly shifted into the Debt Consolidation/ Debt Settlement wave.





I was fortunate enough to have been able to see how one of these large scale Debt operations worked down in Boca Raton FL.





The company will remain nameless but I can tell you that they ended up getting sued by Chase for 3.8 million.





You walked into the place which had the front windows all tinted out so people couldn't see in. There was no major sign on the door marking who the company was. If you walked past it you would have no idea what kind of business they were in.





You open up the front and see what looks to be a normal office setting. Four normal sized offices, two on either side of the hall. But when you walked down the hall you realize what you were dealing with. The hall ended into a room that was the size of a gymnasium with rows and rows of cubicles. Each cubicle was small and only had a computer screen and a phone. This was my first boiler room encounter.





South Florida has always had a bad reputation for shady fly by night businesses. This looked to be no exception.





What they were selling was amazing. The reps were on the line pitching a guaranteed product. A product with a guarantee that there was no way could work. People were being promised a savings of 40% of what they owed. The company had attorneys who specialized in Debt validation and could look at your bills and find mistakes or error that could be used to settle your credit card debt for less. Here the best part. If the errors weren't there, they would make them up! So the reps were encouraged to push the guarantee and lightly glance over the fact that their credit was going to take a huge hit. They even were able to accept a down payment on a credit card, then turn around and bring the credit card on the program!

You could see a big dry erase board keeping track of the sales and the down payments people were making to come on to the program. The sales reps were putting up some big numbers

The reps were making all kinds of money because they got half of whatever they convinced the poor person to send in as down payment. The down payment just went more toward the company fees up front. So the clients were thinking that they were on there path to getting out of debt faster by paying a down payment. In actuality all they were doing was paying a heavy up front fee, and getting more into debt.



So what happened after the account came in? Here's where it gets even better. The clients were to make an agreed upon monthly payment, which was taken from their bank account each month automatically. This payment was supposed to go in to an escrow account building funds for negotiations with the creditors. It has to go through the owners pocket first. I don't know how long it took for the money to go into escrow, but it was a while. All the while, the client is getting harassed by creditors calling who haven't receive a payment in a few months.



If the harassment continued, one of the tactics they debt companies used was this. They would simply tell their client to change the address on where they wanted the bills sent. The creditors would then be sending the bills directly to their office, so the client didn't see what kind of a mess they had gotten into. Assuming the company was actually settling something with the creditor it was typically disputing false claims of charges with the original creditor on the clients behalf.



From reading other posting about this, people tried to call back the companies that were ripping them off only to not be able to get a live person on the phone. Nothing but auto attendants. Refunds were a nightmare.



This went on until about from March of 2007 until June of 2008 until Chase brought a law suite against the company. Everything shut down faster then it was thrown together. The owners moved on to another scam I'm sure

I'd love to hear about your experiences with one of these such companies. (Nothing feels better then bashing a company who screwed you over) It's amazing to look at the lack of a business back bone that some people have.