As part of the testimony of the Senate hearing today on Protecting Consumers from Deceptive Debt Settlement Schemes a consumer provided testimony that named Financial Freedom of America, a USOBA member. It appears the company may have since changed their name, the FinancialFreedomOfAmerica.com website now brings up Financial Freedom Processing.
What Financial Freedom Tells Consumers
We advocate fairness for every consumer seeking debt relief. Our CEO and President, Corey Butcher, is actively helping to ensure fair regulation and consumer protection for the debt negotiation industry and debtors. He represents you as a board member and central region chair of the United States Organizations for Bankruptcy Alternatives.
To set a standard of excellence for our work, we are an accredited member of the United States Organization for Bankruptcy Alternatives (USOBA), whose mission is to advocate for fair regulation and protection of consumers. Our President and CEO, Corey T. Butcher, is a leader in this industry. He serves on the board of USOBA and consults with the organization to develop state-specific agendas.
As you will see the lack of a full and proper refund by the debt settlement company does not appear to come off well and is a reason I fell every debt settlement or debt relief company should provide a liberal refund policy.
Debt settlement companies can make every argument they want about retaining a percentage of funds on a dissatisfied client but the limited short term gain is not work the long-term issue that a company will suffer that retains money when the consumer has received little to nothing of perceived value.
Here is the testimony.
Thank you, Senator McCaskill, for giving me the opportunity to share my experiences with debt settlement. I want to share my story so that others will learn about the debt settlement schemes that are out there. I hope my testimony helps other people who are in the situation I was in.
In 2008, i was working as a real estate appraiser when the slow economy forced me to give up that work. At the same time, there was an illness in my family, so I began having a hard time keeping up with bills. When my credit card debt became too high, I turned to a debt settlement coompany. I had seen advertisements for debt settlement on television, which made promises about helping people settle their debt without declaring bankruptcy. So, it seemed like the right option.
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In February of 2009, I signed up with a debt settlement company called Financial Freedom of America after seeing on if its television advertisements. I called their toll free number and their representative told me the company would get me out of debt within three years without taking bankruptcy. I was made to feel confident that they would handle my credit cards and settle for up to 50% of the original balance. I sent every correspondence from the credit card companies to FFOA, as was instructed, and felt secure in the fact that they were handling these accounts. Their representative also informed me to stop paying my credit card bills, so I thought FFOA was taking care of it.
My monthly payment to Financial Freedom of America was $428.97 per month. It was automatically taken from my checking account. That was a lot of money to me, while I was making around $11.00 an hour at the time, but I wanted to avoid bankruptcy.
After making payments to FFOA for 10 months, I was served with court papers and informed that Capital One was suing me in court. I was surprised because I thought FFOA was handling this for me. I immediately called FFOA and was told I did not have enough money in my account to settle with Capital one. I had paid approximately $4000 by this time and was told I only had about $1,900 in my account. They stated that they had no control on what a credit card company could do and that I did not have enough money to settle the account.
I learned at this time that FFOA had taken over $2,000 in “up front” fees out of what I paid. This did not make sense to me as they didn’t even know what the credit card companies would settle for. It did not make sense that would they take the money up front. They were making money off of me, even though they had done nothing to earn it yet. I called back and cancelled the account and was then told I only had $1,400 in my account. There were several phone conversations back and forth before I received a check for around $1,100. I was just sick about this.
Once the New York Times interviewed me, FFOA decided to return another $1,200 to me. However, I still have not received all of my money back from FFOA. Companies like this are taking advantage of people who are desperate for help and trying to do the right thing. This is a scam and a rip-off.
I thank you for being able to testify about what happened to me and hope it will help other people.
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