Here is my definitive guide on how to get out of a scam and git it your best shot at getting your money back. Warning, it will take some work, but it can be effective.
“Thanks to Steve and GetOutofDebt, we were able to recover enough to pay our bankruptcy lawyer, leaving about $3500 in the hands of the company we trusted. As I look back, they caved in pretty easily, not wanting us to persue the letter writing to FTC, two state attorney generals, and others. It’s likely I could have pushed for more.
Steve, I can’t say this enough. The [education] you provide is of the greatest value to people like us. All of us.”
I’m going to break this process down in stages. It’s important for you to keep tabs on the items in these stages so get a shoebox, folder or just a special drawer to throw all the documentation in as it comes in or you gather it.
I’m starting with the premise that you are in a scam program and want out and have received little to no benefit from the program.
- Start with the company you are having an issue with. Send them a letter by certified mail, return receipt requested.
The postcard you get back will show the name of the company you sent it to, a signature of who signed for it and when they got it.
Explain in your letter that you are unhappy with their services, tell them why, and say you want out of their program and expect a refund paid by X date. Give them at least two weeks from the day you send your letter.
In the letter let them know that if you can not come to a mutually agreeable solution you plan to send a copy of your complaint with the following people:
- The Consumer Financial Protection Bureau. You can file complaint here.
- Your State Attorney General’s office. For a listing, click here.
- The Attorney General’s office for the state where the company is located.
- Your local Better Business Bureau. You can file a complaint online here.
- Any local consumer affairs office your local county government might have.
- The Federal Trade Commission. You can file a complaint online here.
- Any trade association the company may belong to.
- You local television station which does consumer investigations.
- If the company is a law firm or run by a lawyer, you can file a complaint with the Bar Association in your state and their state. For a listing of state bar association links, click here.
“As officers of the court, all attorneys are obligated to maintain the highest ethical standards. In furtherance of this obligation, attorneys are guided by a code of conduct, the Code of Professional Responsibility, as adopted by the Appellate Division of State Supreme Court. Attorneys who violate the law or fail to abide by this code of conduct are subject to discipline, which may include admonishment, reprimand, censure, suspension or loss of his or her license to practice law.” – Source
- If your money is being deposited in a third-party escrow account with separate escrow provider, send a copy of your complaint to them.
- If this matter involves your financial affairs, credit, or debt, then file a complaint also with the Consumer Financial Protection Bureau. You can do that online here.
- If your relationship with the company used the United States Postal Service, you can file a complaint with the U.S. Postal Inspection Service. (Added 12-12-2011)
- If you feel like you are the victim of an internet crime, you can report it to the FBI and the National White Collar Crime Center using this online form. (Added 12-12-2011.)
- You can file a complaint with the Financial Fraud Enforcement Task Force.
- If your issue was with a mortgage modification company you can file a complaint online with SIGTARP. (Added 7-23-2012.)
- And most importantly, be sure to file an online scam report with GetOutOfDebt.org.
- Any communications you receive from this point forward, put in a special safe place. If you get emails, print them out. If they call you, keep a written log when they called, who you spoke with, and what the conversation was about.
- Put a copy of your letter and the certified mail receipt from the post office in that special safe place as well.
- Once the company receives your letter and signs for it you will get the return receipt card back in the mail. Put that card in your special safe place.
- Contact your bank and find out what you need to do to stop any additional debits by the company from your account. The bank may tell you you will have to change your checking account number. Yes, that’s a pain in the ass but it will absolutely prevent future debits.
- If your money is being deposited into a third-party escrow account contact the escrow company, tell them you want a full refund of the money in your account and you want to close your account.
- If the company does not contact or respond to you by the date you specified in the letter, do what you said you would do and file the complaints.
- If the company does respond and makes you a partial refund offer that is acceptable to you, accept the offer but make sure the offer does not come with a requirement for you to waive any of your rights.
Some companies want people to sign statements they will not speak out against the company or waive any further claim against the company. If the company has harmed you that seems like an unreasonable thing for you to waive. However only you can decide what is best for you to do when presented with an offer. If you unsure what rights you may waive then find a local attorney licensed in your state for help.
- If the offer is not acceptable or the company does not respond then file a complaint with the people I mentioned above. If sending your complaint by mail, include copies of your original letter and and the return receipt card showing the company received it. Send these complaints by mail using certified mail, return receipt requested.
- Put a copy of all your complaints and proof you mailed them in your special place.
- Send the company copies of the complaints you send to others as you send them. Send them to the debt settlement company by certified mail, return receipt requested.
- Put all return receipt cards you get back in your special place.
- If you file your complaint online and get an email or some other proof that you submitted a complaint, print that out and put it in your special place.
- Once you file complaints with the folks I listed above, you may notice the company is much more willing to refund your money and put this matter behind them. They want to avoid irritating state regulators, damaging their BBB reputation, and becoming the subject of an FTC investigation.
- If you file a complaint with the people above, it may or may not result in a refund to you but it will put the company on their radar for future enforcement activity against them.
- If you still have not received a fair and reasonable refund then contact your local court and find out how to sue the company in small claims court for your refund. Typically the amounts claimed are eligible to be pursued by individuals this way. And if you go this route all those documents you’ve place in your special place will come in very handy, Take them all with you when you go for your court date.
- If you are not confident to file your small claims suit then find a local consumer advocate attorney here.
If you have paid thousands of dollars to a scam company you are claiming has not helped you, while the process above is a bit time consuming and involves some cost, it will be a worthwhile attempt to get a refund.
Most people that follow this process should expect to get a reasonable refund or an entire refund of the fees paid if you file your request before the company files for bankruptcy.
If you are still unhappy with the company, feel free to file a scam report here.
FREE – How to Get Out of Debt Guides
Below you will find many of free guides and articles that address specific issues about debt and getting out of debt. But before you head off to those posts I’d like to invite you to read How Do I Get Out of Debt Quickly? Change Your Mindset. It is a very important post that addresses how to have the right mindset to best tackle your situation.
Important General Get Out of Debt Advice
- How Do I Get Out of Debt Quickly? Change Your Mindset.
- How to Get Out of Debt. The Honest and Unvarnished Truth.
- There is Life After Debt and It’s Awesome
- Debt Related PTSD and Financial PTSD Quietly Hurts Many
- How Do I Get Out of Debt? – Simple.
- Debt and the Theory of Dissaving. Why You Need to Take Action.
- What Repaying Your Debt Will Cost You in Retirement – Calculator
- The Universal Secret to Dealing With Debt
- Dealing With Debt – It’s All Bullshit
Bankruptcy Articles and Posts You Must Read
To get ready to read the information below with the right frame of mind, please first read How Do I Get Out of Debt Quickly? Change Your Mindset.
- How to Know if You Should File Bankruptcy
- So You Are Going to File Bankruptcy. That’s Great News. Congratulations.
- Easily Rebuild Your Credit After Bankruptcy
- The Truth About Bankruptcy Success Rates
- How to Get Out of Debt Calculator
- How Long After Bankruptcy Can I Buy a House?
- Is Bankruptcy Sinful and Bad or Right and Moral? An Examination
- What Does the Bible Say About Bankruptcy? Is Bankruptcy Scriptural?
- How to Get Out of Debt. The Honest and Unvarnished Truth
- The Emotional Seven Stages of Debt
- Getting a Job After Bankruptcy
- Chapter 7 Bankruptcy – What is the Truth?
- Low Cost / Pro Bono Bankruptcy Resource Locator
- Bankruptcy Should Be the Last Resort Many Say. But That’s Just Not True
- The Ethical Considerations of Bankruptcy
- Is Bankruptcy Right For Me?
- 14 Reasons You Should Not Avoid Bankruptcy
- How to Really Discharge Your Student Loans in Bankruptcy. Many Can. But Never Try.
- Life After Bankruptcy: How to Quickly Have Great Credit and Dumb Mistakes to Avoid
- How to Find a Great Bankruptcy Attorney
- You Have Not Failed if You File Bankruptcy
Life After Bankruptcy
Budgets and Budgeting
Calculators and Tests
- Money Personality Quiz and Test. What Are Your Spending Habits?
- How to Get Out of Debt Calculator
- The Hidden Cost of Credit Counseling and Debt Settlement
- Consumer Credit Counseling Pros and Cons. My Ultimate Guide to Understanding How Credit Counseling Really Works.
- The Hidden Cost of Credit Counseling – Calculator
Credit Score / Credit Repair Advice
- The Get Out of Debt Guy Free and Easy Credit Repair Guide
- How to Easily Rebuild Your Credit and Have Good Credit Again
Debt Collector Help
- How to Dispute and Ask a Debt Collector to Validate a Debt
- How to Deal With The Debt Collector
- Most Debt Buyer Lawsuits Foiled By Inability To Prove Debt Owed
- Hooray, You Are in Collections! The Debt Collector is Calling. The Debt Collector is Calling.
Debt Consolidation Loans
- The Ultimate Debt Consolidation Loan Guide: Getting Approved, Acting Smart, and Being Wise
- Best Debt Consolidation Loans
Debt Relief Program Issues or Problems
- How to Try to Get a Refund From a Debt Relief Company
- How to Avoid Getting Scammed When Getting Debt Help
- The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
- 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You
- How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off
Debt Settlement Advice
- Debt Settlement Pros and Cons. My No BS Guide to Settling Your Debt.
- The Hidden Cost of Debt Settlement – Calculator
- DIY Debt Settlement for Those Interested in Do It Yourself Debt Settlement – Podcast
- IRS Form 982 is Your Friend if You Got a 1099-C
Identity Theft Advice
- Life After Bankruptcy: How to Quickly Have Great Credit and Dumb Mistakes to Avoid
- Identity Theft Fraud Victims, Here’s Everything You Ever Need to Know to Fix the Mess
Life After Debt
Be sure to first read How Not to Get Scammed by a Mortgage Loan Modification Company.
First you’ll need to determine your current debt-to-income ratio. The target debt-to-income ratio under the Home Affordable Modification program is 31%. Use this free online DTI calculator.
Mortgage Modification Calculator
The mortgage modification eligibility calculator will ask you several questions and then show you which programs you may be eligible for.
Free Mortgage Modification Help and Counseling
If you have questions about the process or eligibility you can call 888-995-4673 and get connected with an mortgage modification adviser for free. This help is provided by government subsidized HUD Housing Counselors and they can be a big help in navigating the modification process.
In order to assist you, the housing expert will need to gather some information from you. Have the following documents handy:
- Information about your first mortgage, such as your monthly mortgage statement.
- Information about any second mortgage or home equity line of credit on the house.
- Information about the monthly gross (before tax) income of all household members contributing to pay the mortgage, including recent pay stubs if you receive them or documentation of income you receive from other sources.
- Information about your savings and other assets.
- Account balances and minimum monthly payments due on all of your credit cards.
- Account balances and monthly payments on all your other debts such as student loans and car loans.
- Your most recent income tax return.
- It may also be helpful to have: A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.), if applicable.
You can also get free help and housing counseling from a local HUD approved counselor. You can find your local free housing counselor, here.
Contact Your Mortgage Company
Not sure if your mortgage company offers modification programs? Not all do. You can contact your mortgage company to ask them about mortgage modification programs you might be eligible for. Click here to find your mortgage company.
Want to know the net present value (NPV) of your home for the mortgage modification process? No problem, use the free NPV calculator to find out. The NPV calculator is right here.
The calculator can be used by homeowners who have been denied a HAMP modification because of their NPV result or can also be used by homeowners prior to applying for a HAMP modification to help them better understand the NPV evaluation.
No Advance Fees
The Federal Trade Commission has a Mortgage Assistance Relief Services Rule which prohibits advance fees for mortgage rescue services or mortgage modification help.
- Repossession: Why it happens, what you can do, and your rights before, during and after repossession
Student Loan Resources
You can use the following student loan resources to help reorganize, discharge or forgive your student loan payments.
The Overall Guide to Dealing With Student Loan Debt
Discharge Your Student Loans in Bankruptcy
Student Loan Forgiveness and Discharge Information
- The Ultimate Guide to Dealing With Student Loans You Can’t Afford
- Obama Student Loan Forgivess Program
- Military Student Loan Forgiveness and Discharge Programs
- Student Loan Forgiveness or Discharge Can Create a Huge Tax Bill. Watch Out!
- Student Loan Public Service Loan Forgiveness – New Forms and Documentation Released
- Government Student Loan Disability Discharge
Student Loan Consolidation Information
- Student Loan Consolidation Payment and Interest Rate Calculator
- Student Loan Consolidation Opportunities and the Best Way to Lower Your Student Loan Payments
- Federal Direct Consolidation Loan Online Calculator
Specific Federal Student Loan Repayment Program Information
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Income Based Repayment Plan
- Pay As You Earn Repayment Plan
- Income Contingent Repayment Plan
- Income Sensitive Repayment Plan