Debt Consolidation Loan

I’m Concerned About the Colony Associates Offer for a Loan I Received

Written by Steve Rhode

Question:

Dear Steve,

I have a question regarding Colony associates. They reach out to me with suspicious debt re-leaf plan with rate of 3.9 and pre-approved offer.

I’m concerned if it scum/fraud company

In they offer , i can’t find length of the credit , only general number that seems to be good to be true.

Answer:

I’d not heard of Colony Associates before receiving your question so I went and took a look at the website you provided, colonyassociates.com.

I would recommend that anyone considering using such a company should read the following free guides.

  1. The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
  2. 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You
  3. How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off

A recent trend has been companies offering what appears to be a personal loan only to wind up switched into being sold some sort of debt relief program instead.

Colony Associates says, “It’s time to change the way you think about your money: consolidating your monthly payments into one single payment with Colony Associates can change your financial future. Instead of paying multiple high interest rate bills, we simplify things for you. Colony Associates keeps your goals in mind by prioritizing savings and affordability over all. What a revolutionary idea!” – colonyassociates.com”>Source

But Colony Associates says they are actually not a lender, “Colony Associates is not a lender in any transaction and does not make loans, loan commitments, or lock rates.” – Source

They go on to say:

Colony Associates is not an agent of you or any lender. Colony Associates services are only administrative. Colony Associates is a paid marketing lead generator.

I watched the video Colony Associates has on their home page to explain the application process and a couple of points in the video don’t make sense to me.

READ  Should I Avoid Alamo Associates for a Debt Consolidation Loan?

The video says the offer is for an unsecured loan and does not require collateral so it seems odd that the use is specified and it seems to steer consumers into a very narrow niche.

They even go on to say the alleged unsecured loan can’t be used to pay off other debts.

And very specifically say it can’t be used for student loans or auto loans.

Colony Associates says they are located at PO Box 50707, Mendota, MN 55150.The State of Minnesota can’t find a company named Colony Associates that is registered to do business.

So Where Does This Leave You?

Given the fact the company says they are extending you a loan that is unsecured and does not require any collateral but is limited in use and I can’t locate a registered company in their own listed state, I think doing some homework using my guides above is in order.

Sometimes things that seem too good to be true, are.

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About the author

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.

7 Comments

  • I assumed they buy the debt back. So basically the consumer is going into default and you are paying Financial Solutions what you owe. Wouldn’t it make more sense to just go into default yourself since you are going to take the hit to your credit and deal with all the collections activities?

    • What I think makes the most sense is for every consumer to get all their questions answered before they enroll in any debt relief program. I hate assumptions. It’s not clear from what you’ve said if you are being pitched a standard debt settlement solution or something else.

  • I did a little digging. This is Finance Solutions, which you’ve written about in the past. I guess it works by them having you go into default with your credit card companies, which means not paying for up to 120 days (imagine all the collections activities). Then, they negotiate with the credit card companies to buy your debt for pennies on the dollar, but you still owe Finance Solutions the full amount.

    Not sure how this is legal.

    • The default is the typical settlement process flow if a consumer is current. But I think the statement about buying an individual debt is not correct. Typically bad debt is sold in bulk but if you have specific information, please let me know.

  • I got the same solicitation. They offered to settle all my debt for zero interest rate. I know this is a scam, but what concerns me is that they pulled all the information about me from the Credit Bureaus. Is this allowed by Experian and Equifax? Also, how does the scam work? I’m guessing I send them money and they don’t actually forward it to my creditors?

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