Here is my definitive guide on how to get out of a scam and git it your best shot at getting your money back. Warning, it will take some work, but it can be effective.
“The steps listed in How to Try to Get a Refund From a Debt Relief Company should represent a consumer dropping a “nuclear bomb” on any business.”, says debt settlement company president. – Source
“Thanks to Steve and GetOutofDebt, we were able to recover enough to pay our bankruptcy lawyer, leaving about $3500 in the hands of the company we trusted. As I look back, they caved in pretty easily, not wanting us to persue the letter writing to FTC, two state attorney generals, and others. It’s likely I could have pushed for more.
Steve, I can’t say this enough. The [education] you provide is of the greatest value to people like us. All of us.”
I’m going to break this process down in stages. It’s important for you to keep tabs on the items in these stages so get a shoebox, folder or just a special drawer to throw all the documentation in as it comes in or you gather it.
I’m starting with the premise that you are in a debt relief program you are not happy with and want out. I’m assuming you have received little to no benefit from the program.
- Start with the company you are having an issue with. Send them a letter by certified mail, return receipt requested.
The postcard you get back will show the name of the company you sent it to, a signature of who signed for it and when they got it.
When you write the letter there is no reason to me mean and nasty. Be sure you present your side of the issue with a level head reasonable tone. Explain in your letter that you are unhappy with their services, tell them why, and say you want out of their program and expect a refund paid by X date. Give them at least two weeks from the day you send your letter.
In the letter let them know that if you can not come to a mutually agreeable solution you plan to send a copy of your complaint with the following people:
- The Consumer Financial Protection Bureau. You can file complaint here.
- Your State Attorney General’s office. For a listing, click here.
- The Attorney General’s office for the state where the company is located.
- Your local Better Business Bureau. You can file a complaint online here.
- Any local consumer affairs office your local county government might have.
- The Federal Trade Commission. You can file a complaint online here.
- Any trade association the company may belong to.
- You local television station which does consumer investigations.
- If the company is a law firm or run by a lawyer, you can file a complaint with the Bar Association in your state and their state. For a listing of state bar association links, click here.
“As officers of the court, all attorneys are obligated to maintain the highest ethical standards. In furtherance of this obligation, attorneys are guided by a code of conduct, the Code of Professional Responsibility, as adopted by the Appellate Division of State Supreme Court. Attorneys who violate the law or fail to abide by this code of conduct are subject to discipline, which may include admonishment, reprimand, censure, suspension or loss of his or her license to practice law.” – Source
- If your money is being deposited in a third-party escrow account with separate escrow provider, send a copy of your complaint to them.
- If this matter involves your financial affairs, credit, or debt, then file a complaint also with the Consumer Financial Protection Bureau. You can do that online here.
- If your relationship with the company used the United States Postal Service, you can file a complaint with the U.S. Postal Inspection Service. (Added 12-12-2011)
- If you feel like you are the victim of an internet crime, you can report it to the FBI and the National White Collar Crime Center using this online form. (Added 12-12-2011.)
- You can file a complaint with the Financial Fraud Enforcement Task Force.
- If your issue was with a mortgage modification company you can file a complaint online with SIGTARP. (Added 7-23-2012.)
- And most importantly, be sure to file an online scam report with GetOutOfDebt.org.
- Any communications you receive from this point forward, put in a special safe place. If you get emails, print them out. If they call you, keep a written log when they called, who you spoke with, and what the conversation was about.
- Put a copy of your letter and the certified mail receipt from the post office in that special safe place as well.
- Once the company receives your letter and signs for it you will get the return receipt card back in the mail. Put that card in your special safe place.
- Contact your bank and find out what you need to do to stop any additional debits by the company from your account. The bank may tell you you will have to change your checking account number. Yes, that’s a pain in the ass but it will absolutely prevent future debits.
- If your money is being deposited into a third-party escrow account, contact the escrow company, tell them you want a full refund of the money in your account and you want to close your account.
- If the company does not contact or respond to you by the date you specified in the letter, do what you said you would do and file the complaints.
- If the company does respond and makes you a partial refund offer that is acceptable to you, accept the offer but make sure the offer does not come with a requirement for you to waive any of your rights.
Some companies want people to sign statements they will not speak out against the company or waive any further claim against the company. If the company has harmed you that seems like an unreasonable thing for you to waive. However only you can decide what is best for you to do when presented with an offer. If you unsure what rights you may waive then find a local attorney licensed in your state for help.
- If the offer is not acceptable or the company does not respond then file a complaint with the people I mentioned above. If you are sending your complaint by mail to those other resources, include copies of your original letter and the return receipt card showing the company received it. Send these complaints by mail using certified mail, return receipt requested as well. The goal here is to document everything.
- Put a copy of all your complaints and proof you mailed them in your special place.
- Send the company copies of the complaints you send to others as you send them. Send them to the debt settlement company by certified mail, return receipt requested.
- Put all return receipt cards you get back in your special place.
- If you file your complaint online and get an email or some other proof that you submitted a complaint, print that out and put it in your special place.
- Once you file complaints with the folks I listed above, you may notice the company is much more willing to refund your money and put this matter behind them. They want to avoid irritating state regulators, damaging their BBB reputation, and becoming the subject of a FTC, or CFPB investigation.
- If you file a complaint with the people above, it may or may not result in a refund to you but it will put the company on their radar for future enforcement activity against them.
- If you still have not received a fair and reasonable refund then contact your local court and find out how to sue the company in small claims court for your refund. Typically the amounts claimed are eligible to be pursued by individuals this way. And if you go this route all those documents you’ve place in your special place will come in very handy, Take them all with you when you go for your court date.
- If you are not confident to file your small claims suit then find a local consumer advocate attorney here.
If you have paid thousands of dollars to a debt relief company you are claiming has not helped you, while the process above is a bit time consuming and involves some cost, it will be a worthwhile attempt to get a refund.
Most people that follow this process should expect to get a reasonable refund or an entire refund of the fees paid if you file your request before the company files for bankruptcy. In my experience, debt relief companies that start not communicating well and are not reasonable are headed to an unfortunate end. Some file for bankruptcy protection and some just vanish.
If you are still unhappy with the company, feel free to file a scam report here.