Get Out of Debt Guy - Steve Rhode

CFPB Says Debt Settlement Complaints Still a Significant Number

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The Consumer Financial Protection Bureau (CFPB) has just released their latest information concerning complaints they have fielded.

In their complaint category of “other financial services” that includes credit repair, check cashing, money orders, and others; debt settlement complaints are significant.

The CFPB said, “The most common type of other financial service complaints consumers complain about is debt settlement (50 percent). The most common issues identified by consumers are problems with fraud or scam (51 percent) and customer service or customer relations (18 percent).”

What is interesting in looking at the raw CFPB data is it is not just debt settlement companies listed in that category. It includes some credit counseling, student loan assistance, payday loan help and money management companies as well.

I’d have to say the claim the debt settlement category is comprised just of “Debt Settlement” companies is a misleading claim. The CFPB press release will skew public perception of the debt settlement market.

However if you read the CFPB report it does break it down further. The report says:

  1. A majority of other financial service complaints involved fraud or scam as the consumer’s primary issue. These complaints involved consumers seeking to settle or consolidate outstanding debts—often student loans—with creditors.
  2. Consumers reported making good faith payments to debt relief companies to pay off existing debt to creditors. Some consumers stated the payments were never forwarded to their creditors and they are now facing lawsuits for accounts they presumed were paid.
  3. Some debt relief companies required upfront fees to be paid by consumers prior to being accepted as clients. Consumers stated that after paying the fees they often encountered little to no communication from the companies on the status of the accounts to be settled. Some consumers reported the accounts were often settled for much less than the amount stated to them by the debt relief company and that they met resistance when trying to obtain a refund for the difference.
  4. Many consumers that sought to consolidate student loans reported some companies advertised being affiliated with the federal government or acting as a third-party vendor to federal student loan servicers. The consumers complained of being defrauded or scammed out of upfront fees with no relief provided on their existing student loan debt.
  5. Consumers looking to repair their credit expressed concerns of being scammed by credit repair companies after no relief was provided and requests for reimbursement went unacknowledged.
  6. Consumers complained of problems when attempting to redeem money orders, including purchased money orders being returned as invalid and fraudulent. These consumers report delays in the error resolution process that often resulted in no reimbursement for the value of the money order or the fee paid at the time of purchase.

You can see a listing below of CFPB debt settlement complaints.

A random example of the recent complaints can be found below and you can determine for yourself how valid these complaints might be. It goes without saying the responses from the companies in these samples is that it was a misunderstanding or they did provide the service sold.

In some cases a refund was provided to the consumer.

Core Advisory Group

“I had contacted Core Advisory about my mortgage situation about 6 months ago. At the time, I didn’t have the money to start the process as I didn’t know that this company was not suppose to charge me. I then get a foreclosure sale date 4 months later and I had the funds to begin the process. Core Advisory promised me that they will ” stop ” the foreclosure and force the mortgage company to give me a loan modification. I gave them {$1600.00} up front {$1500.00} for the company and {$120.00} for the notary that came to my home so that I can sign some papers. I also, gave the notary for Core Advisory XXXX post dated checks for XXXX, XXXX, and XXXX. I did stop the one for XXXX as my suspicions were evident. A case manager was assigned to me in which he drafted some letters for me to send via certified mail to be sent to the mortgage company, HUD, and the the local congressman. I was then assigned a ” trustee agent ” in which he told me that he would investigate XXXX. He called me and told me that he was putting me on XXXX way so that I could authorize him to speak to XXXX on my behalf. The sale date was getting close and he told me if it comes to it to file for bankruptcy with a ” lady ” he knows that would help me with this. Well, that day before the sale, I was on XXXX way again with him and XXXX and found out that XXXX ‘s paperwork was n’t right and the sale date was until the following month. I tried contacting the trustee and he did answer after 2 days and when I told him that I wanted to file for bankruptcy, he said ” no ” it ‘s better to wait. I tried contacting Core and all I get is a voicemail.”

Records indicate some amount of monetary relief was provided by the company.

Manhattan Beach Venture – Student Loan Relief Program

“Student loan scam. Signed up after they promised to eliminate my interest, get out of default, and get a fixed payment. Realized after that I was scammed, give credit card info for preliminary payments. Was supposed to receive paperwork in the mail, never got it. They call themselves Student Loan Relief Program, called Manhattan Beach Venture LLC when they tried to withdraw money from my account. Luckily, it didn’t work and I’m not sure why … .not sure what to do next.”

Clear One Advantage

“I contacted Clear One Advantage XX/XX/2016, I spoke with a young man named XXXX XXXX about some credit cards I needed help with. He assured me he could help settle my debts, I had a loan with XXXX XXXX XXXX, it was an unsecured revolving line of credit in which I did not want to include. but XXXX told me I could get a cheaper payment if we included this one so I did. You know when you call these companies you expect them to be honest and upfront with you but they was not. XXXX told me to quit making my monthly payments and that for 3 months my credit score would drop but they would have my debts settled in 6 months and then my credit score would go back up. Since XXXX XXXX XXXX was my largest debt I wanted them to work on that one first and he assured me he would put that top priority. After I signed some papers that they emailed me, they said they would mail the original one to me but I never received it. They did not put XXXX XXXX XXXX at the top of the list, I started getting phone calls from my creditors of course, so I contacted Clear One much to my surprise I no longer had XXXX to speak with but a totally different place and phone number. this representative advised me not to answer any phone calls just to let them leave messages and I could contact a company called XXXX and they would help me with the phone calls. Needless to say, for 7 months they deducted {$400.00} from my checking account which totaled $ XXXX settled XXXX account during this time and it was with XXXX and they had n’t even contacted me about a payment. they settled {$820.00} and they kept {$350.00}. I was served a summons by our sheriff from XXXX XXXX XXXX and I had 20 days to respond, I contacted Clear One, they said to fax the summons in which I did and I got an email explaining to me they was not an attorney ‘s office and they could not give me legal advice. Had they told me from the beginning they were not going to settle my debts I would not have signed up with them. Another man named XXXX called me later in the day and assured me they would contact XXXX XXXX XXXX but I had to give them 5 to 7 days, I decided I was not going to wait for them to contact anyone, I called XXXX back that afternoon and told him I wanted out of the program. so he said that was fine, they would send me the money I had in my account which was {$960.00}, a far far amount from {$2800.00} minus the XXXX account..I feel as though I should have {$1600.00} remaining in my account. If this XXXX XXXX would have told me in the beginning that there was a chance I could be sued I would have never eve signed up with them. when I called them my credit score was XXXX, now it ‘s XXXX and I ‘m having to contact my creditors and set a payment arrangement up myself. Thanks to Clear One Advantage my credit score will never be what it was and I called them several times and they never reacted to anything except just kept telling me I had to wait until I got money in my account before they could settle the big ones. What a joke, I could have lost everything I have worked for dealing with these people and I still may lose everything I have.”

The Student Loan Help Center – Brelvis Consulting

“In XXXX, I had inquired about consolidating my student loans with The Student Loan Help Center. My student loans had went to default and i was afraid that I wouldnt be able to get them out of default. So i called this company The Student Loan Help Center. They made me feel like they were going to help me get my student loans out of default. They ask for a payment upfront of XXXX dollars. I didnt have all of it at the initial conversation. So i paid XXXX dollars intially and setup XXXX payments for 2 months of XXXX dollars. I was very hesitant about giving them the money. But, they reassured me that if i was not happy with the service i would get my money back. I realized later on in the month that i was dealing with XXXX companies. They had to send my information to another company for processing. So which that would make them a 3rd party. So, periodically I would call The Student Loan Help Center to check on the status of the consolidation process. But, everytime I call they would tell me that everything was going fine and i should hear something back in XXXX. But, that was not true, it was not okay, because they sent me a letter XXXX XXXX, 2016, stating that the consolidation process needs to be reinstated please contact their office. So when i spoke to their Representative XXXX, he had to put me on a conference call with XXXX XXXX. I was angry that they did not let me know that this had happened. I done some research and found that my consolidation has been this way since XXXX. They never thought about notifying me about this matter. The Representative lied to me about this matter. I also had a chance to speak with a Manager XXXX, today he was very arrogant and threaten to take me to collections if i canceled with them. I asked them to provide me with a invoice copy of services. In which would in detail explain what the money was used for. He quickly explained that they do not have to provide that statement to me. I really felt like i got taken advantage of. I would really like to have this company investigated for fraudulent activity and obtaining documents without having a license to do so.”

Records indicate some amount of monetary relief was provided by the company.

Apple Law Firm

“On XXXX XXXX I called Apple Law firm to help me with my debt problem. A friend gave me a number to call that she saw in a t.v advertisement. So I called and got set up. Signed contract and supplied creditors information, a Notary lady came to my house to sign papers. It was until recently I applied for a car loan and found out that all my credit accounts were in bad standing and on my credit report. I called the office and cancelled contract using XXXX as a way out. I sent a cancellation XXXX by fax, email and talked to office manager XXXX XXXX to cancel. I was not happy with service. I requested a refund for my money back and they customer service email account replied it can take XXXX. Copy of email in attachment ). Well that was 5mos ago. So I reported to XXXX XXXX, They sent XXXX correspondences within 4weeks on my behalf with no reply. Case closed. So now I am sending all my information in an attachment regarding emails, contract, and other notices. I even suspect Apple Law firm scammed IRS. I had my identity stolen and someone filed XXXX taxes using my social security number that I reported to Apple Law group on XXXX XXXX, XXXX XXXX XXXX XXXX who said she’d make a note of it, Also, that creditors were still calling, harassing me at home calling multiply times a day. I have phone records to prove that.regarding my late accounts. .Apple Law group has never supplied me with any name of attorney they worked under even though it says in contract, business license, or tax id number. Only have spoken to ” XXXX ”, ” XXXX ” possibly same person and Once to the Manager XXXX XXXX who I had to talk with regarding closing my account-contract. I NEVER received information on pending accounts or work done on my behalf. They received {$390.00} per month from my checking account. XXXX XXXX, I sent copy of sent XXXX statement with my address, and was told to change address with the New Address- Apple Law group XXXX XXXX XXXX XXXX XXXX XXXX XXXX, XXXX XXXX, California XXXX. Its in the contract. On XXXX XXXX, XXXX XXXX creditor called me to offer me a settlement on my account. I started to get suspicious but continued working with Apple Law.
I’ve been scammed. ”

Nationwide Biweekly Administration

“nationwide biweekly with drew XXXX from my checking account to make mortgage payments on my house in XXXX ohio. They did not make a single payment and will not ansewer their phone.I contacted the bbb last month, they donot seem to care at all, they even post on their web site that all complaints have been settled. I contacted nationwide in XXXX 2015 and they did return XXXX to my account, but they still have XXXX of my money.”


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