Anyone know of a Business Debt Settlement company
Q. Anyone know of a good debt settlement company?
A. These places are in the news right now. A number of them are about to lose their nonprofit status because of anti-consumer practices. "An operation billing itself as a debt negotiation company that promised to reduce consumers' debt, negotiate with creditors, and stop harassment from debt collectors in exchange for various fees instead pocketed the fees and plunged consumers deeper into debt, according to the Federal Trade Commission. The FTC charges that Better Budget Financial Services (BBFS) and its principals, John Colon, Jr. and Julie Fabrizio-Colon, have defrauded consumers out of hundreds or thousands of dollars each, causing many to be sued by their creditors and forcing others into bankruptcy. The FTC has asked the court to award consumer redress to the victims. On November 3, 2004, the court entered a temporary restraining order halting the defendants' allegedly illegal business practices, freezing their assets, and appointing a temporary receiver pending a preliminary injunction hearing. "This scam has had devastating consequences for consumers who thought they were taking the right steps to get out of debt," said Lydia Parnes, Acting Director of the FTC's Bureau of Consumer Protection. "They signed up for the defendants' services in good faith and expected the company to act accordingly. Now the defendants have learned that reneging on a promise to help people settle their debt has serious consequences, too." The FTC received substantial assistance in bringing this case from Massachusetts Attorney General Tom Reilly's Consumer Protection and Antitrust Division. According to the FTC, Massachusetts-based BBFS has advertised its services through Internet advertising and on its Web sites since at least August 2000. The defendants' Web sites, www.betterbudget.net and www.termidebt.net, claim that BBFS can negotiate with consumers' creditors to reduce their debt by 50 percent. Consumers who contact the defendants are promised that the defendants will negotiate with consumers' creditors for a non-refundable retainer fee, monthly administrative fees of $29.95 to $39.95, and 25 percent of any savings realized by a debt settlement. According to the FTC, consumers typically paid the defendants hundreds or even thousands of dollars in fees. The FTC's complaint states that consumers who sign up with BBFS provide the defendants with a list of all their creditors and the total amount of their debt. The defendants then tell consumers to set up a special bank account and deposit a calculated sum into the account, which will be used to pay creditors and pay BBFS its monthly fee. The defendants allegedly tell consumers to stop paying their creditors directly, claiming that consumers' failure to pay their creditors will demonstrate a "hardship" condition that will enable BBFS to negotiate on their behalf. The defendants claim they will settle each creditor's account once the consumer saves half the amount they owe on each debt. According to the FTC, BBFS also tells consumers to sign power of attorney forms, claiming that the forms will enable BBFS to contact creditors on the consumers' behalf and instruct debt collectors to stop calling consumers directly. The consumers are instructed not to talk to any creditors who contact them directly. Further, the defendants allegedly tell consumers that negative information may appear on their credit reports while they are working with BBFS, but that the information is temporary and that BBFS will direct consumers to a company to get assistance repairing their credit. The FTC charges that, rather than negotiating with consumers' creditors as promised, the defendants in numerous instances fail to contact creditors and debt collectors. Instead, consumers continue to be contacted by their creditors, receive repeated phone calls from debt collection agencies, and incur late fees and penalties on their credit accounts, increasing their debt and worsening their financial situation. The FTC's complaint states that the defendants in numerous instances fail to negotiate with creditors even after consumers call to let them know they have sufficient funds set aside to pay a settlement. In many cases, consumers have been sued by their creditors, resulting in them paying substantial legal fees. According to the FTC, as a result of the defendants' scam, many consumers have been forced to file for bankruptcy." http://www.consumeraffairs.com/news04/ftc_better_budget.html .