WSJ Article Slays Debt Settlement Companies Using Personal Loan Offers to Bait and Switch

The Wall Street Journal recently published an article “That Offer to Make You Debt-Free? It Can Make You Worse Off.”

I’ve long been critical that some personal loan offers being mailed to consumers are potentially a bait-and-switch tool to tell people they don’t qualify for a loan and instead are switched to an expensive debt settlement sale.

One of the companies named in the WSJ article is Greenlink Financial, who I’ve written about before.

According to the WSJ article, “Former GreenLink employees said only a small number of people who responded to the company’s mailings were offered loans. Instead, they were pitched a debt-settlement program that GreenLink sells on behalf of San Mateo, Calif.-based Freedom Debt Relief, the former employees said.

GreenLink’s salespeople were taught to “get the client’s guard down,” according to a GreenLink telephone sales script reviewed by the Journal. The Journal couldn’t determine the date of the script.

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Most people who responded to GreenLink mailers were told they would be called back after loan-underwriting checks had been made, the former employees said. On that second call, the salespeople were told to say, “I couldn’t stop thinking about your file” and to pledge, “I am going to make YOU my top priority today,” according to the script.

Then, the consultants were told to break it to the caller that he or she didn’t qualify for the loan offer the company mailed, the script said.

“But this actually turned out to be GREAT NEWS!” the salespeople were instructed to say, according to the script, before pitching the debt-settlement program that offers “a payment which fits perfectly within your budget.”

It was also said, “Ms. Ricchio called Simple Path Financial LLC, of Irvine, Calif., but was refused the 4.99% loan she had been pitched. Instead, she said she was offered a debt-settlement program, which she was told would cause only a “slight hit at first” to her credit score.

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Ms. Ricchio, who had worked for a credit union where her father was chairman, said she didn’t believe the claim. “I know this kind of program would actually cause serious damage to my credit score,” Ms. Ricchio said.”

Reporting was critical that debt settlement or pseudo-personal loan offers may be using credit report data to target mailers, in a purpose not clearly approved for such an application.

If you would like to read the full WSJ article, click here.

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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.
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