Business Models Debt Relief Industry

Debt Free Options Catches Eye of Tipster

A site tipster (send in your tips here) sent in the following statements about Debt Free Options at debtfreeusa.biz.

Doesn’t make sense, they say “…reducing your debt by up to 70%” but then say “beware of debt settlement”

Did they use enough BBB logos?

So I took a look. Sure enough Debt Free Options does use a lot of references to the BBB. Eight alone on the home page.

Pushing the BBB that hard just makes me want to dig deeper.

The tipster (send in your tips here)’s comment about the debt reduction has me intrigued as well. They beat up pretty heavily on debt reduction, debt negotiation, and debt settlement but also make the claim that debt can be reduced by 70%. Yet on inspection they appear to only be selling a debt management plan. How can that be?

The company says it has changed it’s name from Debt Solutions USA but the interesting fact is they in fact have not. Debt Solutions USA is a Florida for-profit company that still exists. Debt Free Options is a new and separate company. The last public action on Debt Solutions USA was not a name change. On 10-21-2010 they made a registered agent change. – Source. On 11-5-2010 Debt Free Options registered as a new for-profit company. – Source. The owner of both companies is Virginia Swanson.

The office address for Debt Free Options on corporate documents appears to be that of a virtual office. – Source.

The address they list on their site, 2520 Coral Way, Suite #2360, Coral Gables, Fl 33145-3442 is also the address of Debt Solutions USA and NoDebt. – Source. According to UPS, the address is actually a mailbox at the UPS Store.

So Debt Free Options has an online enrollment form and appears to be a service provider but it truly appears they are a lead generator. Knowing they are a for-profit company, it was enlightening to read how the process works. They say, “We will begin processing your lifestyle management account when we receive your enrollment paperwork. A few days after we receive your paperwork someone from our customer care department will call you to verify your account information. We will then setup your personal financial analysis and budgeting software. We will also provide your information to the non-profit debt management group.” – Source

READ  I Bet Debt Solutions USA is Going to Be Contacted About This

So it appears to me that since their corporate documents say one of their purposes is to “provide budgeting software” and their process says people first setup software so my bet is their is a charge or ongoing cost for that software.

It clearly appears they are not the service provider since they say they send they debt management plan to a non-profit debt management group. Who they send it to, who knows. But if the underlying credit counseling agency does not enjoy the same A+ rating that is probably misleading to solicit new customers using a high rating.

There is no way of knowing who will receive the confidential client information when people complete the enrollment forms on the Debt Free Options or Debt Free USA site. They call themselves by both names.

My advice is to proceed cautiously and get answers about who the underlying service provider is before coughing up any personal information.

I’m also very skeptical about their claim, “We have thousands of clients all over the United States,” (source) since they only began business three months ago.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.


I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.




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.

19 Comments

  • Creative? Yes. Genius? Not so much. Stripped down, the buydown only represents an expensive coupon for debt relief services. You can present it to the FTC, but you will never get their blessing. In fact, I think Steve already has presented this to them, and here is what he reported:

    I heard back from the FTC on this and here is what they said:

    “We would look to the prohibtion on “requesting or receiving payment of any fee or consideration” before settling a debt in determining this. It doesn’t matter what a service provider calls a fee – it is still a “fee or consideration.” We look to whether the payment is in fact consideration for a service, not the name an entity has for it.”

    I understand that you have not committed to using this model yet. Knowing what Steve has shared, do you still plan to move forward with this model?

  • I agree, they may say possible or potential I believe but must disclose that no one is guaranteed a settlement. The creditor has the choice not to settle if they want but truth is, banks are recouping losses because of debt settlement companies and should be happy they have an opportunity to collect something and be thankful that we are getting people to do what they can’t and that’s pay them.

  • Your correct because unfortunate circumstances like loss of job or illness can affect completion as well as their ability to save. If they do their part in saving and restructuring their lifestyle without unfortunate circumstances I can guarantee that we will manage their accounts from start to settlement and also alleviate the stress of them not understanding their rights as debtors and what can possibly happen or what is more time sensitive than the next. Thanks for pointing that. Take care.

Leave a Comment

Scroll to Top