A reader contacted me with a question, here. She said that a company called Nationwide Financial Center sold her into a debt management program for which she first had to pay $1,295 before she could get in to the credit counseling program.
She sent me the agreement she signed to put the $1,295 on her HSBC credit card so she could get into the program.
Nationwide Financial Center, LLC
6390 Greenwich Drive
Suite 140
San Diego, CA 92122
800-901-3550
As you can see, Nationwide Financial Center sold this consumer a “Financial Success Kit” for $1,295 and the consumer believed they had to purchase the kit to get into the Nationwide Financial Center debt management program.
The “Financial Success Kit” consisted of:
- The Busy Family’s Guide to Money – 300 page glossy book/
- 100 page information booklet designed to help you regain your financial stability
- Rebuilding Your Credit – eGuide
- Budgetting and Personal Forms – printed and on CD
- i-MoneyQuest – your personal on-line, interactive financial literacy course
- Plus, over 40 financial education videos
The disclaimer says the person is paying for the kit and not enrolling into a debt relief program. And while that will probably be the defense of the company, this consumer surely believed that buying the kit was a necessary first step. It also appears to be what was represented by the sale representative according to the consumer.
The consumer said:
Mike, the rep, said up front that their fee was 5-10% of the debt amount and was added to it so there were no out of pocket expenses.
When he sent the quote, I assumed that the $50 per month was that fee (it works out to between 5 and 10 per cent).
When he sent the final agreement to sign, it was in two sections: one was about the plan to pay my creditors, and the other was about the “financial success package” that I uploaded below.
As I went through the web pages describing the terms, I saw that twelve ninety five was $1,295, so I called Mike back and said “I don’t want to spend this!” He said that this was the fee that we had talked about, and I felt a little stupid for having assumed that the fifty a month was the fee.
As part of the credit card purchase for this kit the authorization form appears to allow the buyer to enter up to four credit cards to spread the purchase price across.
What is very interesting about the DMP plan the consumer entered into on the very same day through Nationwide Financial Center is the agreement for the debt management plan. The multipage agreement had these two pages as the heart of the DMP.
If you look at the agreement you will notice one very important issue, the debt management provider is not identified as Nationwide Financial Center. In talking to the reader about this she said NFC said they would refer her to one of their nonprofit partners.
It appears this is nothing more than an unnecessary and unwarranted charge related to a credit counseling enrollment and this violates the law in a number of states, including the state where the consumer resides.
Beware of practices like these and if you are asked to pay a large fee upfront before enrolling in a debt management plan or credit counseling program, report it here.
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Let me know who they refer you to.
That’s the argument I stated they would probably give you but it was clear from your communications that the two items arrived in concert.
Bottom line, they never should have sold you any service for more than $50 or so in advance of putting you into a DMP.
So they sold you into a debt management program and had you sign an agreement for one but can’t instantly tell you who the provider is? That’s alarming.
Steve,
A manager phoned to answer my questions related to fees and which company they work with. He said it had been explained to me incorrectly, and that the Financial Success Kit was separate from the debt management plan. He said that they offer their F.S.K. customers a “complementary” placement with a debt management service in the customer’s state, and that the amounts quoted for interest rate reductions would be accurate because all the companies get the same rates. He said that, to avoid confusion, he would process a refund for me on the Financial Success Kit, then call me when he had the name of a debt management company in my state.
Steve,
A manager phoned to answer my questions related to fees and which company they work with. He said it had been explained to me incorrectly, and that the Financial Success Kit was separate from the debt management plan. He said that they offer their F.S.K. customers a “complementary” placement with a debt management service in the customer’s state, and that the amounts quoted for interest rate reductions would be accurate because all the companies get the same rates. He said that, to avoid confusion, he would process a refund for me on the Financial Success Kit, then call me when he had the name of a debt management company in my state.
Let me know who they refer you to.
That’s the argument I stated they would probably give you but it was clear from your communications that the two items arrived in concert.
Bottom line, they never should have sold you any service for more than $50 or so in advance of putting you into a DMP.
So they sold you into a debt management program and had you sign an agreement for one but can’t instantly tell you who the provider is? That’s alarming.