Sham Debt Relief Agency fined Millions by FTC

The Federal Trade Commission enters to a judgment of more than $7.9 million against a sham debt relief agency for defrauding thousands of dollars while providing nothing in return.

In a complaint filed in May 2014, the FTC alleged that the DebtPro 123 LLC defendants were accused of causing consumers to fall further in debt by directing them to stop making payments and to stop communicating with creditors.

Unfortunately, these consumers found themselves in a worse position both having paid the sham debt collectors while building up their debt due to late fees and interest payments.

The fact is the debt collection industry has long had a bad reputation and this group of defendants only further the negative stereotype. I am shocked every time I speak to a prospective client about bankruptcy and I learn that they have paid hundreds of dollars per month and thousands of dollars total to a debt settlement company, but their debt keeps on rising. How many more will be suckered into this shams? Why are consumers so ready to hand over hard earned money for a magic pill that magically disappears their debt?

If it sounds too go to be true, it probably is. Just like the modification scams that tell borrowers not to pay their mortgages and then homeowners find themselves months behind in mortgage payments, most underhanded tactics such as simply ignoring your creditors come back to bite you in the end.

Trust but verify. Fully read and review the contract with the debt settlement company. Understand how it earns its fees. Are there exhorbitant account fees that deplete your payment so that you are only paying a paltry sum towards your debt? Get as many facts before you sign up and start spending your hard earned money.

Getting out of debt is hardly ever simple. As I tell my bankruptcy clients, the bankruptcy filing may be your only viable option, but there is also a rebuilding phase after you receive your discharge.

You have to get your creditworthiness back one account, one on-time payment at a time. It takes time. It is not 7-10 years as most consumers believe. Some folks are able to buy a home in two years, but they work at doing the right things and you can too.