Debt Relief Industry Sued or Sanctioned

Vortex Debt Group Sued For Just About Everything

Vortex Debt Group out of Florida is a name familiar to me. I’ve written about them before, here.

Yesterday Vortex was sued by Terry Rudd in a class action suit. It seems that Vortex really wanted to control the client and allegedly left the client disadvantaged.

“The Vortex representative hid from plaintiff the fact that the agreement purported to contain a waiver of plaintiff’s right to sue Vortex, an arbitration provision, a waiver of plaintiff’s right to participate in a class action lawsuit against Vortex, a waiver of plaintiff’s right to participate in a class action arbitration against Vortex, a waiver of plaintiff’s right to a trial by jury, and a waiver of plaintiff’s right to pursue any action against Vortex whatsoever unless plaintiff pursued the action in Florida.”

In January 2010 Rudd had $12,000 in debt and heard a Vortex radio and television commercials where Vortex Claimed it could settle the consumer debt quickly and for a fraction of the amount owed. The Vortex site allegedly said they had a “proven debt settlement program”, it was “one of the best alternatives to bankruptcy.” and people could “make low monthly payments.”

The website pointed Rudd away from bankruptcy, credit counseling, or debt consolidation loans in favor of the Vortex debt settlement program.

After enrolling the client the Vortex representative told Rudd to stop paying his creditors and start sending $205 each month to Vortex.

The suit goes on, you can read it here. Bottom line, if all of the allegations are true in this suit then instead of a win-win solution for the consumer the deal was a “gotcha.”

As more and more debt settlement companies move to the new contingency fee models, this kind of stuff will be avoid.


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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.

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