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Is The Credit Exchange a Scam on the Ropes?

Certainly an interesting comment from a concerned employee at The Credit Exchange about recent activity there.

I work for this company but not in the sales part. Movemynetworth was promised to be a huge sucess by its owners and all it did was get us more trouble it seems. After reading this I can now see why. My friends in my department are being laid off and the sales reps salaries were all taken away and they were put on 1099 pay [independent contractor] this month. I guess this means they dont have to pay the employees salaries anymore. I was told that we are so broke that we cant pay our employees and we are trying to save money anyway we can to stay in business. Yet the owners just keep saying everything is fine and we have nothing to worry about. Im starting to think this is all one big scam. I also heard the credit exchange is in a lot of trouble and being sued. – Source

The Credit Exchange does not have the best reputation as far as selling consumers into top notch debt settlement programs, having been a referral source for both Allegro Law and Hess Law, both companies that were shut down by their respective State Attorney Generals’.

But now, it certainly can’t be viewed as a good sign that they are selling a four year contract budget program and their employees are concerned about just having a job next month. The move to switch employees from salaried position to independent contractors seems like a desperate move to save money but will leave the employees and the company in a worse spot. I doubt the company will be able to truly make the case the employees are independent contractors and I doubt the employees will realize they may not be eligible for benefits, no social security payments will be made by the employer, the company may claim the contractors are not eligible for unemployment, and the now contractors will be responsible for paying their own taxes out of the pay they will make.

I just can’t see how The Credit Exchange can justify switching the employees to 1099 contractors in the same jobs. I seriously doubt the employees are suddenly compliant with the criteria of a contractor. If they are paid by the hour (not the project), report to a company office (not their own office), must perform the work personally (can not send someone else to do it for them), use the employer’s equipment (not their own), and do not hold themselves out as being in business for themselves (do not advertise in the yellow pages, do not have have employees of their own, etc) then they are NOT 1099 contractors.

My bet, this is not going to end well for clients, customers, the company or the employees.

You can read all the stories about The Credit Exchange, here.

Is The Credit Exchange a Scam on the Ropes?
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Skateboard Boy

    I used to work for this company as well, my knowledge goes a lot deeper than most of what is posted here. There are still a lot of great people that work there and this is probably the reason most ex employees dont come out against Steve Vanderhoof. Since the company is now on its last leg i suggest to any potential client to stay away. Also, unless you like wasting your time and more importantly money, stay away from MoveMyNetWorth. Steve does not own his lamob’s or even his house, it is all leased on the companys name and it is all a fake. His best atribute is being able to use other people’s hard work or money to pay for his drug addiction.
    good luck

  • concerned person

    Can anyone confirm these stories? Are these guys going BK? Allegro law filed for bankruptcy recently, I am concerned the Credit Exchange is next.

    Any info from current employees would be a huge help.

    • TCE

      Unfortunately it is all true. TCE is going Bankrupt and they have started a multi level marketing scheme called Movemynetworth.com to get as much money as possible from people before it’s all over. It’s extremely disturbing and sad. What is your conection with this company? I was just laid off with about 90% of the staff.

      • concerned person

        how long ago were you laid off? It seems like this has all happened in the last 2 months or so. I know Allego is going BK, that might have hurt TCE’s credibility with people.

  • http://none Mystery Guy

    I worked for The Credit Exchange. Let me tell you what Steve Vanderhoof has done to its employees. First of all, he changed the pay structure to the sales reps from a salary vs. commission structure to a 10/99 in which everyone is still required to wear shirt and tie (HUH???) AND each “independent contractor” PAYS — that’s right, he or she PAYS — for the “privilege” to work there. How much? Glad you asked. Each rep pays $300 for desk fee; $500 for leads; $65 for parking and — of course — they are forced to join the Move My Pyramid Scheme dot com so they also have to pay all of that ($150 start up, $150 for promoter and $50 per month). As if that was not enough, there is also a “training” for the Move My Pyramid Scheme thing and reps are “urged” to attend…and they have to PAY for these. That’s right — each rep has to pay $10 for each training session that they attend.

    I have left The Credit Exchange and I am sick of all the lies. Steve Vanderhoof actually told everyone that the leads cost $1000 a month at least and that the desks cost $600 per month and he is putting up half his money. LIES,LIES, and MORE LIES.

    The people working for The Credit Exchange end up getting ripped off more than its clients.

    • DebtSucks

      Hahahahahahahaha! So true!!!! I left a long, long time ago – before it ever got this bad. How that place is still up and running is beyond me!

  • Concerned

    Should I be concerned about fraud if I do not meet the 1099 requirements you listed above? Can I be PERSONALY held liable from the IRS over this?????

    • http://GetOutOfDebt.org Steve Rhode

      As a 1099 employee you will be held responsible for paying the income tax due on your 1099 wages plus you will have to pay social security and the employer match part of your FICA that is currently deducted from your check.

      The reclasification as a 1099 employee is going to cost you more and not beneficial to you at all.

      Steve

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