At one time Damian Kutzner was living the debt relief high life. He had participated or even concocted the mass joinder mortgage elimination scheme at the height of the real estate meltdown. A large number of good people believed the sales hype. The end result was a couple of attorneys who are suspended, a couple of people in jail, and a couple of people still fighting the government to avoid terrible fates.
Well, Damian Kutzer eventually received a sentencing hearing and was given 70 months in federal prison in Sheridan, Oregon. He is also ordered to repay total restitution of $587,864.22.
But I asked Damian if he would share some of the lessons he has learned from his experience and he graciously agreed.
What I Learned From Inside the Debt Relief Industry
By Damian Kutzner
What Advice Do You Have for People Who Feel Like They Were Caught in a Debt Relief Scam?
Show up to their place of business if you live close, sales offices hate that.
Find as many names working at the office most importantly the owners. But don’t stop there get the secretary the mail room name make everyone uncomfortable for taking your money. As the old saying goes “the squeaky wheel gets the oil.” It is true in sales. Be the loudest online voice with multiple postings and make a complaint with the CFPB and the BBB. Make a police report.
Submit your SCAM to as many Pro Consumer/Pro Active bloggers and websites as you can.
We used to HATE when Steve Rhode and GetOutOfDebt.org wrote about us. It made our skin crawl. We had to confront it! Which exposed us.
USE THE RESOURCES THAT ARE OUT THERE and DON’T STOP. You will get your money back if you become their biggest headache. Don’t be the fly they try to brush away.
Why Do Some Bad People Get Into the Debt Relief Industry?
This goes back to the beginning of “Telemarketing” which was started in the 19th century called “Telephonists”. Any type of sale over the phone that is fast and makes money without having to conduct a lot of time there will always be fraudster waiting to jump in the game.
I was in the Loan Mod business and saw many companies training on selling a fake service. They prey on the emotions. If they hear in your voice any emotion they call it a “HARM”. They create sell scripts to train on that specifically go over these “HARMS” and what time in the call to repeat the emotional “HARMS” back to the customer. This will make the customer make an EMOTIONAL buy which then can be controlled vs a Logical thinker.
Types of Telemarketing fraud:
Advance fee fraud – They will typically require upfront payments in exchange for goods and services. This is also a popular technique used in lottery and student scholarships scams. Once the target has provided their personal information, the fraudsters will ask them to pay various fees – for example: taxes, legal fees, banking fees, etc. – so that they can release their non-existent winnings.
Pyramid schemes – Work by recruiting “members” to invest in a scheme. Most of the money is made by recruiting new members and a prime characteristic of the scam is the product is of little value. The people at the bottom of the pyramid pay the people at the top. Inevitably they will run out of new recruits and the scheme will collapse. Some individuals may profit from pyramid schemes, but the vast majority of those who join later on in the scheme will not.
Credit card fraud – Fraudsters will call with promises to repair their credit ratings, provide credit options or credit facilities, credit cards with zero or very low interest, or instant and unlimited loans without credit checks or security. Such offers, if followed up, tend to come at a considerable cost to victims in terms of high-interest rates or exorbitant fees. It is common for scammers to target people who have bad credit and are therefore more susceptible to take the offer in hopes to pay off debts or to increase their credit rating.
Overpayment fraud – One of the most popular scams making the rounds. A generous overpayment is made to the victim typically using a fake cheque. This can vary in goods but is popular among online auctions or classifieds. But before the cheque has been cleared by a bank and the victim discovers that the cheque has bounced, the scammer will request to have the difference refunded. Usually through an online banking transfer, pre-loaded money card, or a wire transfer such as Western Union. Therefore, victims lose the money they send along with the item itself.
Charity fraud – Telemarketers claiming to represent charities call asking the target for a donation. Fake charities try to take advantage of people’s generosity and compassion for others in need. Scammers will steal the money by posing as a genuine charity; they may try to use recent events, such as natural disasters, to make their phony pleas for donations sound more believable. These scammers use aggressive high-pressure techniques made to make the victim feel guilty or selfish if they do not want to donate.
Cramming – Small charges that are secretly inserted into customers’ credit card bills for services they did not order, buried so deep in credit card bills that many do not notice, usually with fake fees by vague financial services. Sometimes a one-time charge for entertainment services will be crammed onto phone bills. Other times it may be a recurring monthly charge. Cramming of recurring charges falls into two general categories: club memberships, such as psychic clubs, personal clubs, or travel clubs; and telecommunications products or service programs, such as voice mail, paging, and calling cards.
Summer jobs fraud – Much like an advance fee fraud, these scams are aimed at teenagers or young adults looking for work over the summer period. Telemarketers seek out the victims by scanning student job searches. The telemarketer will then claim the victim has been singled out and specially selected to be hired for a particular job. Before they can start work, however, they are told that they have to pay various fees to cover training, materials, and insurance. When they eventually realize the job is a scam, it is already too late; they have lost the money they paid for in fees as well as the time it would take to find a new job.
Office supply scam – A very common scam where a telemarketer will target business managers responsible for purchasing office supplies, falsely representing their identity and the cost of office supplies – the most popular being toner. The caller might mislead a company’s employees into thinking that an order for office supplies has already been placed, either by an existing or former colleague and that they are calling to chase up a signature for the order form to help them keep complete records. The company is then invoiced for unwanted, and overpriced, stationery and office supplies.
Magazine subscriptions scam – Scammers call victims with an intriguing offer and that for a small payment they can get a yearly subscription to their favorite magazine, even though they have no affiliation with the magazine’s publisher. When victims agree, the scammers will send random magazines with grossly inflated prices. Another way they extract money is by falsely telling callers it is time to renew their magazine subscriptions in an attempt to get their credit or bank account information.
What Tricks Did You Learn From Your Experience
Just like El Chapo or any other drug ringleader. No matter how many you take down they are always new ones going to pop up.
The way to not fall victim to this system in Debt relief scams or Loan Mod scams is to educate yourself and KNOW what you are looking to do so your NOT SCAMMED into anything as you will know what is correct and what is not correct.
I’ve personally had my house in foreclosure over 13yrs and I have received 100s of mailers over the years. It’s easy for me to see which ones the BS scammers and which ones are telling the truth. WHY because number one I know the industry vernacular and number two I personally went thru foreclosure, so I know the hoops you have to jump thru.
The main issue with NEW “ideas” or NEW ways to sell something is they try to take out what is “KNOWN” and make it a “NEW UNKNOWN”. Similar to weight loss industry what they do in diets. They advertise (Based on emotion) this NEW diet that works, and it’s called “XYZ” and we are the only ones who have it or know how to give it etc. That’s what happened in the Loan Mod business during the 2008-2009 mortgage crash. No one knew what LOAN MODIFICATION was, so it was NEW!
Same with Debt Relief it’s a NEW way to reduce your Bills or Student loans etc. Every consumer should verify EVERY business with FACTUAL DATA. Meaning if they say they are going to save your house then ask to see examples of them saving a house with your EXACT scenario (Most will use one as their benchmark scenario they train the sales floor to sale). Then call their competitors (I’m sure you should have a couple of dozen in your mailbox) and see what their sales guy or attorney thinks and how they feel their service is better than what the first company told you.
You will get them trying to qualify themselves and exposing the dirty secrets they know about their competitor. Please educate yourself and it is relatively easy now the Debt relief and Loan Mod business has been around with all the Newness gone.
I tell people to UNDERSTAND their financial affairs and understand it to the point where your searching for what you need versus not knowing and getting told what you want. Here is one example: Filing BK is good and helps a lot of people out. But if you don’t know Chapter 7 bankruptcy then you can get yourself worse off then you know. If you are trying to complete a Loan Modification under the Home Owner Bill of Rights (HOBR) then filing BK waves your HOBR rights.
It is NO LONGER a requirement for the banks to follow in adhering to your Home Owner Bill of Rights. So, you could disqualify yourself from being heard in a Loan Modification submission by filing BK because some salesperson or attorney told you to so they can make their commission.
My point here is not to give legal advice but to show that knowing a little about something is like knowing a little about karate. You get your ass kicked. On the other hand, the person on the phone your talking to goes thru weeks of training and “Roll Playing” to sharpen their skill in speaking with YOU. Here is an example:
I have 10 tricks to help you succeed at making cold calls.
- Get over your fear. It’s not personal. To recipients of your calls, you are a voice coming through a small plastic device, someone who has interrupted whatever they were doing. No matter how badly someone treats you, realize that the minute the call is over, she will forget about you, so you can do the same. Second, understand that telephone cold calling is a numbers game. You need to get enough no’s to get to a yes. When viewed this way, “no” simply becomes one more step toward “yes.” Once you are over the fear of making calls, there are a number of techniques and tricks that will help you be more effective.
- Leads. Lead generation is an entire subject in and of itself, so for the sake of brevity, I will assume you have identified a list of target customers to call.
- Plan your calls. Set aside enough time to get into a rhythm–at least two hours per block. And plan to get through a set number of calls. Usually, morning is better than afternoons, but after hours (see below) can also be very good. Note that I did not say to avoid calling at other times. More calls equal more sales. I have even had success calling during the holidays.
- Plan each call. What is the objective? Normally, it won’t be to introduce yourself, describe your product and make a sale all in a single call. Typically, it should be limited to one of these. So if your objective is to set up a sales appointment, craft your script to this goal and stick to it. Avoiding getting drawn into a discussion outside of this objective will improve your success rate and earn you credibility with the target, as she will recognize that you are also a busy professional.
- Your voice. Businesspeople may be courteous toward amateurs, but they like to do business with other professionals. Your voice can convey either. If you’re nervous, your voice gets higher. In addition, nerves increase the speed with which we speak. Deliberately counteract these tendencies. Before you call, lower your voice. Think of yourself as a very important person about to call another important person. Say your first words extra slowly. Be polite but not overly “sweet.” Remember, you are important. Also, smile when you speak. This will add warmth to your voice.
- Your script. This should be uncomplicated and direct. Introduce yourself with confidence and credibility, provide a brief explanation as to why you are calling and ask for your objective: ”Hi John, this is Mary Jones, president of XYZ company. I have a product that we use with several other companies like yours, such as example 1, example 2. I am working in your area next Tuesday and Thursday morning and would like to briefly show you how we saved these companies $___. I have a slot at 9 a.m. on Tuesday. Would that work? Note: When you get a question, one good technique is to answer directly and briefly and follow with a question. Example: ”How do you save them money?” ”We have a new proprietary system that reduces waste by more than 50 percent. I see I also have an 11 a.m. slot…does 9 or 11 work best?
- The gatekeeper. This is the person whose job it is to shield your target from unwanted telephone calls. This person is not your friend, but don’t make her your enemy. Your first call to a gatekeeper will be telling as to how hard your target will be to get on the telephone. Assuming you have already figured out who your target is, when you make your first call and the receptionist or assistant answers, simply state in a polite but authoritative manner:
You: “This is Mary Jones. Is John in?”
Gatekeeper: “Who? Pertaining to?”
You: “Yes, Mary Jones with XYZ. Is he there or should I call back?”
You’ll know fairly quickly how hard it will be to get through the gatekeeper. I suggest that you only leave messages on a cold call as a last resort. Your target will not call back. However, you can always get useful information from this interaction. Example:
Gatekeeper: “I can take a message if you like…”
You: “Oh, thank you. I’m on my way out but can try back later. What time do you expect him?”
Gatekeeper: “About 4 p.m.”
You: “OK, how late is someone there answering the phone? And what time can I reach you in the morning?”
These last two questions sound innocuous, but if she answers them, you’ll know what time to call to avoid the gatekeeper. Often executives and owners work later than the gatekeeper or come in before the gatekeeper arrives, and they will often pick up an unanswered phone. Also, many phone systems have an individual extension directory that you can access after hours. If this doesn’t work, you can call at another time and simply ask for the sales department. Virtually every receptionist in America knows that when people call for sales, they get directly to a salesperson. Like you, salespeople are busy. When they answer you say, “Oh, I must have gotten the wrong extension, I was trying to reach John. What is his extension?” Don’t be surprised if this person simply transfers you directly to the boss. And when that happens, be ready to launch into your script as though he would be happy to hear it.
”Oh, hi, John. Mary Jones here with XYZ company. I have …”
- Hang up. Once you achieve your objective, say, “Thank you, I will see you at 9 a.m. on Tuesday. Goodbye.” Many people succeed at getting consent or closing a sale. Then, feeling good, they open up a new line of discussion with their new friend, only to see the sale unravel. Again, stop talking and hang up.
- Don’t let your phone give you away. Most office phones have caller ID. Find out what a receiving caller’s caller ID says when you call. If it says, “XYZ Sales Company,” you are starting off at a disadvantage. If it has your personal name or “private,” you are much more likely to pique their curiosity enough to answer.
- Get started. The anticipation of making calls is 100 times worse than making them. And you will get better every time you make one.
So that is an example of HOW MUCH TIME AND FOCUS the Sales agent spends on understanding YOU to get the sale. I truly believe if each individual spent time on their own financial affairs that the financial telemarketing scams would be cut in half.
I wanted to share my thoughts as we can target names and companies (One by One). However, for everyone we attack and shut down, there is three more that pop up. Its best, in my opinion, to address where the root of this sales game can be neutered by knowing the game than to address the individual company that won’t be here tomorrow.