People in desperate financial straits will sometimes go to desperate lengths to get out. And some companies use questionable practices to capitalize on their plights.
The most recent example is an Addison-based company that promised to cut consumers’ credit card debt, but instead charged hefty fees in violation of state law, according to the Texas attorney general’s office.
The company, Debt Relief USA, has filed for bankruptcy, leaving thousands of clients without promised help and many in worse financial shape than when they started, state officials say.
Investigators say they are working to recover an estimated $4.6 million that the company withheld from about 2,500 customers in Texas and other states.
“We are working through the bankruptcy court to get money for the people who paid for their services,” said Tom Kelley, a spokesman for the attorney general.
Another of the debt settlement companies, American Debt Control in Grapevine, has earned an F from the bureau because of, among other things, the number of consumer complaints. Those include not contacting clients’ creditors, a key part of the service. The BBB also reports that the company operates in some states that prohibit for-profit debt settlement services from soliciting customers.
Read the entire article ‘Use of Debt Settlement Firms May Be Unnecessary, Unwise‘ online.