Our office handles claims and problems with debt consolidation companies. There are a number of issues and problems.

1. Overstatement of the Ability to Correct Credit

Some companies overstate their ability to change your credit rating, which is a sophisticated measure of a number of factors including credit and payment history. Companies will generally not agree to alter a history to resolve a claim unless a good reason is shown. Worse, some debt consolidation companies will suggest you stop making payments, which downgrades your credit rating.

2. Predictions of Success

While telling people of many successes, the reality can be different, with disappointed consumers and overstated predictions. The company's self-reporting can tell you little. Before you engage a debt consolidation company, check online reviews on places like bbb.org, the Better Business Bureau site. While their compilations can be impressive, their ratings can be ignored, and a company with multiple complaints could still receive an A if they respond to them.

3. Reality Does Not Match the Description in a Sales Call

Debt consolidation companies often promise things like:

"We can eliminate much of your debt at a low cost."

You might find promises in the sales call, but the agreement contains disclaimers and fails to incorporate those promises. The reality can be disappointing. We are happy to review claims of deception or unfulfilled promises. Consumers should record their initial debt solicitation call where permitted under state law.

We can eliminate much of your debt at a low cost

 4. Monies Are Not Allocated as Promised

It would be nice if one could simply rely on the debt consolidation company, but frequently oversight and review are needed. Check if debts have been paid and request confirmation. Periodically, there have been complaints about misallocation or monies retained that the consumer thought were to be used for payment. For example, one FTC complaint stated:

"Defendants' telemarketing and debt validation scheme violated the TSR and the FTC Act. Plaintiff first alleges they misrepresented a debt relief service, in violation of the TSR and Section 5 of the FTC Act. Specifically, Plaintiff claims the company represented to consumers they would be out of credit card debt within 24 months when they were not, and these Defendants did not apply consumers' monthly payments toward consumer debts. Company officers initiated outbound telephone calls that delivered prerecorded sales messages in violation of the TSR, failed to truthfully and promptly disclose the seller's identity in their outbound telephone calls in violation of the TSR, and the company received a fee for a debt relief service before renegotiating, settling, or reducing the terms of a consumer's debt."
United States v. Stratics Networks Inc., 23-cv-0313-BAS-KSC (S.D. Cal. 2024)

5. Overstatement of the Ability to Compromise Debts

Debt consolidation companies sometimes exaggerate their ability to negotiate or compromise debts, leaving consumers frustrated with unmet expectations.

6. Prior History

Periodically, a company could have been involved in prior problems and reopened under a new name. Here is an excerpt from one FTC investigation:

"The FTC has pointed to uncontroverted evidence establishing that HGM began operating its deceptive debt relief telemarketing scheme several weeks after the Court entered a temporary restraining order in FTC v. Life Mgmt. Servs. of Orange Cty., LLC, No. 6:16-cv-982-Orl-41TBS (M.D. Fla.) against a similar operation (Life Management Service of Orange County, LLC). The individuals that set up HGM had connections with the individuals involved in the Life Management case and used some of the same materials that Life Management used in its telemarketing scheme."

7. Telemarketing Solicitation

There are a number of laws against telemarketing. Persons listed on the Do Not Call List should not be called. The company's name and number should be displayed, and the solicitation should accurately describe the program. Our office is handling claims involving deceptive telemarketing in the debt relief industry. 

Call (973) 479-5515 for a Free Consultation on Your Debt Consolidation Problem

You may also like:

• Types of Сlaims for Failure to Pay Warranty

• TCPA Claims

• Robocall TCPA Claims Against Timeshare Resolution Companies

• Telemarketing Lawsuit

• How to Stop Car Warranty Calls and Get Compensation

• Defending Debt Buyer Claims

Keywords: credit card scams, first advantage debt relief, credit attorney near me, consumer fraud lawyer