Atlas Consumer Cooperative and Fingo Group is a Big Mistake I Think? – Valerie

“Dear Steve,

I am in CC debt for $47,000.00 and signed up with Atlas/Fingo in April 2011. I was looking for a way to lessen my debt so i could have a chance of paying it off in a reasonable amount of time. I saw the question from Jenny regarding the Atlas/Fingo group and hope i didn’t make a big mistake by contracting with them.

I saw the question from Jenny regarding Atlas Consumer Group/Fingo. I saw your information regarding the companies not being able to charge a sign up fee. I signed up with them in April 2011 and they charged me a $300.00 sign up fee. The contract that they gave me over the internet is very confusing to me. The first page is the client monthly budget and the second page is the Discount and Monthly Payment Addendum which says i am entitled to a discounted fee of 5% instead of the usual 30%. My biggest concern is i’m afraid to pay more than i’m supposed to pay monthly because i’m afraid the money will dissappear and none of my CC debt will be paid.

Valerie”

Dear Valerie,

Thank you for reaching to me for help. And a big pat on the back for including your client contract as well.

I looked it over and have some real concerns.

Let me go through this page by page and add my comments.

Your budget looks flawed and seems to set you up for almost sure failure.

I could not help but notice that your budget does not pride any realistic set aside for future home repairs, leaves your without any health insurance, pet care expense (even though you have pet(s)), or life insurance, puts you on a budget of $300 a month for all food you consume, allows for no entertainment, and more glaring, it provides no allowance for saving. You absolutely must be able to save at the same time you get out of debt so unexpected expenses don’t land on credit you won’t have anymore. I see you are paying them for budget help and if they advised you the no savings approach was a smart thing to do, it’s not.

I would bet you this budget does not actually represent your real spending based on you tracking your cash for a month or so to find out where your money really goes. Most budgets created without tracking the cash are way off.

To me this page makes it clear the Atlas Consumer Cooperative, although sold as a voluntary and extra service, is really nothing more than a bogus forced settlement fee.

This page clearly says that if you discontinue your enrollement in the Atlas Consumer Cooperative, which is a mandatory monthly fee of $150, your debt settlement rate will go up. To me that looks like a mandatory bundled service which creates a problem with the FTC rules.

Bundled Products – Selling products or services other than debt relief services in order to then offer debt relief services is NOT a loophole. The FTC has a long history of targeting the bundled product approach and has specific written guidance covering these activities from their experience in going after credit repair services. – Source

The Fingo Group says it is located at:
Fingo Group, Inc.
Address: 7590 E Gray Rd. #204
Scottsdale, AZ 85260
Phone: 877-891-7719
E-mail: info@fingogroup.com

I noticed they said, “While we go to work negotiating on your accounts as soon as you sign this contract” but wonder what negotiations they have actually undertaken for you to date?

Again they say they will get to work straight away, “our efforts on your behalf begin immediately when you sign up for this Program.”

They seem to do a good job of laying out the consequences of participating.

I may not be the brightest bulb in the box but I can’t help but notice they are now saying your settlement fee is $14,098.20 when just a couple of pages ago they were saying it was $2,349.70 with their “voluntary” consumer program. I call foul on that forced consumer program. It looks even more clear that’s just a deceptive spillway for your money to get around the law against advanced fees.

They also say that 40% is an estimate but I find that impossible to believe. First of all, it’s a round number. The figure looks unsupported and would be in violation of the FTC Telemarketing Sales Rules for debt settlement services.

The FTC says two important things on this.

In calculating the results you’ve achieved over time, you must include customers who dropped out or otherwise failed to complete the program. Don’t base your savings claims only on customers who successfully completed your program.

Company K had 10 customers signed up for its service. Each one had $10,000 in unpaid credit card debt for a total of $100,000. Five of the customers completed the program, and each saved $5,000 – for a total savings of $25,000. The remaining five customers dropped out of the program, each one still owing the $10,000 they owed when they signed up with the program. Taken together, Company K has saved its customers $25,000 – or 25% – of the total $100,000 debt they had when they signed up with the program. It would be deceptive for Company K to exclude the drop-outs and claim that it saved its customers 50% of their debt.

Include all debts enrolled by your customers, not only those that have been settled successfully. In calculating your savings claim, you may not exclude accounts you failed to settle, even if the failure was due to customers dropping out of your service.

Company L has 10 customers, and each of them enrolls two $1,000 debts in the program – totaling 20 debts or $20,000. Company L is able to settle 10 of the 20 debts, each for $500. However, it was unable to settle the remaining 10 debts before those customers either completed or dropped out of the program. Thus, Company L has saved its 10 customers $5,000 or 25% of their debts in the program. It would be deceptive for Company L to exclude the 10 accounts that weren’t settled and claim a savings rate of 50%.

Now this next bit contradicts those two claims they were going to get right to work contacting your creditors and settling your debt. Before they said, “While we go to work negotiating on your accounts as soon as you sign this contract”, and ““our efforts on your behalf begin immediately when you sign up for this Program”, but now they say “You will need to save 40% of any given debt in your reserve account before we will contact your creditors and offer settlements.” So which is it?

I understand the possible reason for the statement that you can’t accept the settlement offer from your creditor before talking to your specialist. Maybe they want to make sure the settlement offer is a good current offer. But the restrictive language is a little disconcerting. After all, it is your debt and your creditors.

They tie you in to mandatory participation with the Atlas Consumer Cooperative and other unnamed various organizations and associations. How much is that going to cost? It’s not disclosed.

Do you really want to be forced to become a member of an auto program you might not want?

Again they say they are going to get right to work making settlement offers to creditors. Frankly, I don’t believe them. Why don’t you call your creditors and ask them what kind of contact they’ve had so far with the Fingo Group. Let me know what you find out.

Earlier they said when you make a deposit, $45.19 would be held in escrow towards a settlement fee, now they say it is $271.12. Odd.

On a positive note, the refund policy on face value seems fair, that is until you factor in the forced Atlas Consumer Cooperative program. But it seems that if you withdrew from the program at this time, all you would be out would be the stupid Atlas Consumer Cooperative payments you’ve made so far since I doubt they’ve settled any debt yet.

Very interesting that they say you can complain all you want about their services to United States Organizations of Bankruptcy Alternatives (USOBA), the Better Business Bureau, or a governmental agency, but they don’t want you talking out publicly. What is there to hide? Hum.

Nothing to comment on.

Atlas Consumer Cooperative says they are located at:

Atlas Consumer Cooperative
2100 West Loop S. Ste. 900
Houston, TX 77027
Phone: (877) 907-0777
Email: info@atlascoop.com

For a company that is supposed to have expertise in budgeting and financial education as their core services I would certainly hope they raised a big warning flag to you about your budget you provided. It’s a financial train wreck waiting to happen.

This looks mostly like a front to sell debt relief services and collect an advance fee. Not only do they do this for debt settlement but also for credit counseling as well. I’d love to know who the credit counseling participating provider is.

They say they can provide you use of the Coop trust account for your debt relief savings but then say they are not a debt relief company. That does not seem to compute.

And for this lovely privilege of being a member you have to pay $300 on signup and $150 a month.

They say you get a 85% discount off Fingo Group services and then they say a 40% discount. Even they are not sure.

This page tells you how to cancel. You might want to keep that information handy.

Blah, blah, blah.

It’s interesting that the Atlas Consumer Cooperative provides you with more paperwork about your debt settlement funds than Fingo Group does. To me this looks like a shell game where the “consumer cooperative” is a rouse to collect advance fees from you when it is illegal to do so in a debt settlement program.

This is just a little observation, the Atlas Consumer Cooperative actually does not list the debt settlement group they say is listed below. So who specifically are you authorizing to speak to and release information about your account? Do they work with other companies or only the Fingo Group?

And more importantly, if Atlas Consumer Cooperative is supposed to be escrowing your money, the numbers don’t add up.

It’s a Stinker

The best I can figure out your monthly payment is Atlas Consumer Cooperative – $150 and your payment to the Fingo Group is $406.68 a month. This means you are paying out $556.68 a month for debt settlement services and other general B.S. you won’t get much benefit from, if any, for a long time. The smallest debt you list on your account is about $13,000. So at their average settlement rate, which I still think is unsupported, of 40 percent of the balance you’d need to save $5,200 for the settlement and that doesn’t even include how much your balance is going to increase before the debt is settled.

In a perfect world with no interest or penalties added by your creditors (which isn’t going to be reality), it would take you 15 months to have enough funds on hand to settle, just the first debt. In the meantime you will have paid $2,550 in wasted fees to Atlas Consumer Cooperative.

If we go back to your budget, even with the perfect budget created for you it means you’d be able to squeak by on $143.32 in alleged extra money. I don’t buy it.

In fact, height does Atlas Consumer Cooperative. Here is their budgeting video that says to include savings.

Video Source

And another video that talks about the benefit of savings. They say their network is complimentary but then force you to pay $150 a month.

Video Source

I don’t see anything good about this plan or approach and personally think it sets you up for failure and lining the pockets of someone else while you struggle to make it through the month.

Before you do anything you owe it to yourself to click here to find a local bankruptcy attorney and talk to them about what bankruptcy would mean for you. Before you discount bankruptcy you need to really understand how it could possible have already eliminated your debt in full by now and have set you on your path to rebuilding your credit. And this is even more important since you told Fingo Group that you were struggling with depression (I did not publish that page). Why leave you in a bad place longer?

By now you have paid the Atlas Consumer Cooperative six months worth of fees plus the signup. That means you’ve laid out $1,200 and what do you honestly have to show for that?

I did notice that there were some other comments around the web that were about the same company. See this one, this one, and this one.

The executive director of Atlas Consumer Cooperative is listed as Jeremy Hass. – Source. Care to guess what the name of Fingo was before they changed it to Fingo? It you guessed J Hass Group, you win. Jeremy Hass also says he is the CMO at JH Home Savings, Director of Marketing at Atlas Consumer Cooperative, CMO at Fortis Financial Group. And was the CMO at J Hass Group. – Source

Update September 21, 2011

I heard back from USOBA and they said they’d never heard of Fingo Group before.

Please post your responses and follow-up messages to me on this in the comments section below.

Sincerely,


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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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