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Debt Free Options Catches Eye of Tipster

A site tipster (send in your tips here) sent in the following statements about Debt Free Options at debtfreeusa.biz.

Doesn’t make sense, they say “…reducing your debt by up to 70%” but then say “beware of debt settlement

Did they use enough BBB logos?

So I took a look. Sure enough Debt Free Options does use a lot of references to the BBB. Eight alone on the home page.

Debt Free Options Catches Eye of Tipster

Pushing the BBB that hard just makes me want to dig deeper.

The tipster (send in your tips here)’s comment about the debt reduction has me intrigued as well. They beat up pretty heavily on debt reduction, debt negotiation, and debt settlement but also make the claim that debt can be reduced by 70%. Yet on inspection they appear to only be selling a debt management plan. How can that be?

The company says it has changed it’s name from Debt Solutions USA but the interesting fact is they in fact have not. Debt Solutions USA is a Florida for-profit company that still exists. Debt Free Options is a new and separate company. The last public action on Debt Solutions USA was not a name change. On 10-21-2010 they made a registered agent change. – Source. On 11-5-2010 Debt Free Options registered as a new for-profit company. – Source. The owner of both companies is Virginia Swanson.

The office address for Debt Free Options on corporate documents appears to be that of a virtual office. – Source.

The address they list on their site, 2520 Coral Way, Suite #2360, Coral Gables, Fl 33145-3442 is also the address of Debt Solutions USA and NoDebt. – Source. According to UPS, the address is actually a mailbox at the UPS Store.

So Debt Free Options has an online enrollment form and appears to be a service provider but it truly appears they are a lead generator. Knowing they are a for-profit company, it was enlightening to read how the process works. They say, “We will begin processing your lifestyle management account when we receive your enrollment paperwork. A few days after we receive your paperwork someone from our customer care department will call you to verify your account information. We will then setup your personal financial analysis and budgeting software. We will also provide your information to the non-profit debt management group.” – Source

So it appears to me that since their corporate documents say one of their purposes is to “provide budgeting software” and their process says people first setup software so my bet is their is a charge or ongoing cost for that software.

It clearly appears they are not the service provider since they say they send they debt management plan to a non-profit debt management group. Who they send it to, who knows. But if the underlying credit counseling agency does not enjoy the same A+ rating that is probably misleading to solicit new customers using a high rating.

There is no way of knowing who will receive the confidential client information when people complete the enrollment forms on the Debt Free Options or Debt Free USA site. They call themselves by both names.

My advice is to proceed cautiously and get answers about who the underlying service provider is before coughing up any personal information.

I’m also very skeptical about their claim, “We have thousands of clients all over the United States,” (source) since they only began business three months ago.

Debt Free Options Catches Eye of Tipster
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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.
  • Andy Faria

    Creative? Yes. Genius? Not so much. Stripped down, the buydown only represents an expensive coupon for debt relief services. You can present it to the FTC, but you will never get their blessing. In fact, I think Steve already has presented this to them, and here is what he reported:

    I heard back from the FTC on this and here is what they said:

    “We would look to the prohibtion on “requesting or receiving payment of any fee or consideration” before settling a debt in determining this. It doesn’t matter what a service provider calls a fee – it is still a “fee or consideration.” We look to whether the payment is in fact consideration for a service, not the name an entity has for it.”

    I understand that you have not committed to using this model yet. Knowing what Steve has shared, do you still plan to move forward with this model?

  • Doug

    I agree, they may say possible or potential I believe but must disclose that no one is guaranteed a settlement. The creditor has the choice not to settle if they want but truth is, banks are recouping losses because of debt settlement companies and should be happy they have an opportunity to collect something and be thankful that we are getting people to do what they can’t and that’s pay them.

  • Doug

    Your correct because unfortunate circumstances like loss of job or illness can affect completion as well as their ability to save. If they do their part in saving and restructuring their lifestyle without unfortunate circumstances I can guarantee that we will manage their accounts from start to settlement and also alleviate the stress of them not understanding their rights as debtors and what can possibly happen or what is more time sensitive than the next. Thanks for pointing that. Take care.

  • Tictoc

    Tic Toc Tic Toc Tic Toc

  • Jason Taylor

    “I guarantee you will get out of debt and get excellent service done properly and promptly.”

    Doug- I get that you will provide excellent service, buy ou cannot gurantee someone will get out of debt, there are many factors. You shoud of said “I gurantee we will do everything within our power to get you out of debt”

  • tic toc

    tic toc tic toc tic toc

  • Doug

    I’d like to clarify when I said “I will say that when this contract got out it was a mistake ” it can read 2 way for people who percieve things differently. It was an accidental error where the wrong contract was sent. All is the same with our contract besides that package deal page.

  • Doug

    I’d like to clarify when I said “I will say that when this contract got out it was a mistake ” it can read 2 way for people who percieve things differently. It was an accidental error where the wrong contract was sent. All is the same with our contract besides that package deal page.

  • Steve Rhode

    Excellent response and comment. Keep us posted.

  • Doug

    My name is Douglas Hutton. As our industry changed I had a lot of nightmares of how it could put potentially any settlement company out of business. New Era, a former employer of mine has many family members on staff. All of which I adored and grew close too. I thought of their families and kids as well as my own family and kids and was hoping to change the industry and keep good companies around. If any client chooses HuttonandDougherty Inc. or New Era (as we know in this industry there is never a guarantee and lots of bad companies out there) I guarantee you will get out of debt and get excellent service done properly and promptly. Dan Smith and Alex Viecco (owners)are very good people with a lot of business experience, knowledge, and Howard (their attorney and settlement department manager)run a tight ship. I will never mind losing a potential client to them because of their length in the industry, how much debt they have settled as a company, and they will do the work(at a higher price).They got a lot of negativeness from their F rating issue with the BBB because in ths industry, unless you buy your rating it can be tough to not be labelled because of dishonest companies and the industry label as a whole. I will also say their negative remarks were mostly about clients paying less to the creditor for settements costing them less than their high fee structure, and some people are just never happy. 90% of the junk said was the way clients percieved things because they don’t pay attention at the beginning, they just want the financial distress to be lifted. New Era gave me the tools to be their top negotiator for years running and the skills for client retention. It’s amazing after 3 years of being gone they still use all my testimonials and audio testimonials. They also helped me see that I needed to create a program for clients at a lot less cost, which before the no upfront fee regulation, our contracts varied at a 10-12% fee structure, in turn giving them their lives back sooner and making their journey towards financial freedom quicker than any other company. So back to the nightmares. On October 28th I realized my nightmares(I had to raise my backend fee to upwards of 15-20% to survive)were turning into a dream when I found a solution that didn’t force any client to pay an upfront fee but merely gave them an option to purchase a package that would save them thousands more than before and give us as companies more rope to provide clients an excellent service and keep our businesses a float. I will say that when this contract got out it was a mistake and I’m sure the tipster (which i pretty much have an idea who it was) got a lower percentage than any other company they shopped out there. I guarantee not any other clients or potential clients will or have recieved this until our attorney looks further into it. We will make sure also that any contract disputes of the contract posted are to code as well as potentially re written if neccessary. I have nothing to hide, I think all companies should have a contract online for people to view. Especially IF YOU ARE HIDING NOTHIN! We also have not crossed any lines or have taken any upfron fees since the closing on October 27 2010. We plan to contact the FTC as well to get the actual legality behind percentage package buy downs, which i must add is genius if it complies to the ftc. then hopefully the entire debt settlement industry will adapt to it. I didn’t think I would create such a stir but GOOD BUSINESS IS FAIR BUSINESS and that is why we are only word of mouth and do no advertising. If that doesn’t show that we are a good company then you will just have to go with your opinions or experience.

  • Doug

    My name is Douglas Hutton. As our industry changed I had a lot of nightmares of how it could put potentially any settlement company out of business. New Era, a former employer of mine has many family members on staff. All of which I adored and grew close too. I thought of their families and kids as well as my own family and kids and was hoping to change the industry and keep good companies around. If any client chooses HuttonandDougherty Inc. or New Era (as we know in this industry there is never a guarantee and lots of bad companies out there) I guarantee you will get out of debt and get excellent service done properly and promptly. Dan Smith and Alex Viecco (owners)are very good people with a lot of business experience, knowledge, and Howard (their attorney and settlement department manager)run a tight ship. I will never mind losing a potential client to them because of their length in the industry, how much debt they have settled as a company, and they will do the work(at a higher price).They got a lot of negativeness from their F rating issue with the BBB because in ths industry, unless you buy your rating it can be tough to not be labelled because of dishonest companies and the industry label as a whole. I will also say their negative remarks were mostly about clients paying less to the creditor for settements costing them less than their high fee structure, and some people are just never happy. 90% of the junk said was the way clients percieved things because they don’t pay attention at the beginning, they just want the financial distress to be lifted. New Era gave me the tools to be their top negotiator for years running and the skills for client retention. It’s amazing after 3 years of being gone they still use all my testimonials and audio testimonials. They also helped me see that I needed to create a program for clients at a lot less cost, which before the no upfront fee regulation, our contracts varied at a 10-12% fee structure, in turn giving them their lives back sooner and making their journey towards financial freedom quicker than any other company. So back to the nightmares. On October 28th I realized my nightmares(I had to raise my backend fee to upwards of 15-20% to survive)were turning into a dream when I found a solution that didn’t force any client to pay an upfront fee but merely gave them an option to purchase a package that would save them thousands more than before and give us as companies more rope to provide clients an excellent service and keep our businesses a float. I will say that when this contract got out it was a mistake and I’m sure the tipster (which i pretty much have an idea who it was) got a lower percentage than any other company they shopped out there. I guarantee not any other clients or potential clients will or have recieved this until our attorney looks further into it. We will make sure also that any contract disputes of the contract posted are to code as well as potentially re written if neccessary. I have nothing to hide, I think all companies should have a contract online for people to view. Especially IF YOU ARE HIDING NOTHIN! We also have not crossed any lines or have taken any upfron fees since the closing on October 27 2010. We plan to contact the FTC as well to get the actual legality behind percentage package buy downs, which i must add is genius if it complies to the ftc. then hopefully the entire debt settlement industry will adapt to it. I didn’t think I would create such a stir but GOOD BUSINESS IS FAIR BUSINESS and that is why we are only word of mouth and do no advertising. If that doesn’t show that we are a good company then you will just have to go with your opinions or experience.

    • http://GetOutOfDebt.org Steve Rhode

      Excellent response and comment. Keep us posted.

    • Jason Taylor

      “I guarantee you will get out of debt and get excellent service done properly and promptly.”

      Doug- I get that you will provide excellent service, buy ou cannot gurantee someone will get out of debt, there are many factors. You shoud of said “I gurantee we will do everything within our power to get you out of debt”

      • Doug

        Your correct because unfortunate circumstances like loss of job or illness can affect completion as well as their ability to save. If they do their part in saving and restructuring their lifestyle without unfortunate circumstances I can guarantee that we will manage their accounts from start to settlement and also alleviate the stress of them not understanding their rights as debtors and what can possibly happen or what is more time sensitive than the next. Thanks for pointing that. Take care.

    • http://northeast-properties.com Andy Faria

      Creative? Yes. Genius? Not so much. Stripped down, the buydown only represents an expensive coupon for debt relief services. You can present it to the FTC, but you will never get their blessing. In fact, I think Steve already has presented this to them, and here is what he reported:

      I heard back from the FTC on this and here is what they said:

      “We would look to the prohibtion on “requesting or receiving payment of any fee or consideration” before settling a debt in determining this. It doesn’t matter what a service provider calls a fee – it is still a “fee or consideration.” We look to whether the payment is in fact consideration for a service, not the name an entity has for it.”

      I understand that you have not committed to using this model yet. Knowing what Steve has shared, do you still plan to move forward with this model?

  • Just a matter of time

    All of us bad actors & scammers want to personally pay Steve & his list of cronies a visit to thank you 1st hand on all of your hard work!! Where can we find you?

  • AlexV

    Hi Steve,
    According to the BBB guidelines, their advertising material will not be incompliance, the use of the BBB logos and the A+ needs to be displayed in a certain format. I am curious how they wil look at this advertisement.
    Thank you for bringing to light. Consumers will be wiser ask questions and hoepfully make wiser decisions.
    Alex Viecco

  • AlexV

    Hi Steve,
    According to the BBB guidelines, their advertising material will not be incompliance, the use of the BBB logos and the A+ needs to be displayed in a certain format. I am curious how they wil look at this advertisement.
    Thank you for bringing to light. Consumers will be wiser ask questions and hoepfully make wiser decisions.
    Alex Viecco

    • Doug

      I agree, they may say possible or potential I believe but must disclose that no one is guaranteed a settlement. The creditor has the choice not to settle if they want but truth is, banks are recouping losses because of debt settlement companies and should be happy they have an opportunity to collect something and be thankful that we are getting people to do what they can’t and that’s pay them.

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