A tipster (send in your tips here) forwarded me an email from a company called Phoenix Marketing Managers that claims to have a superior product for the debt relief industry and is seeking affiliates. Only one problem, it seems like it is way too expensive and will draw the attention of regulators with some of the unsupported claims made.
From the pitch it claims to be a combination of debt invalidation, credit repair, and catching a debt collector doing bad things.
The claim is it is the “least expensive relief option available anywhere” but there is no proof given that it isn’t the least effective approach available anywhere as well. I still have not seen any debt relief solution that is more effective and less costly than a Chapter 7 bankruptcy.
When asked for backup of the claims made, none was made available for this article by Phoenix Marketing Managers or Debt Defense Services, who you will read about shortly.
The marketing material claims that no 1099C will be issued which leads me to believe that the approach will not be to address the underlying debt but simply to deal with debt collectors attempting to collect debt which may be valid.
Since the claim is also made that FDCPA attorneys will sue debt collectors for continuing to call clients, that leads me to believe the process will hinge on sending third party debt collectors cease and desist letters, which does not limit the collector from suing the consumer instead of communicating with them. Also, this approach is not effective against the original debt owner.
I’m perplexed by the claim that debt can be invalidated permanently. I’m not aware of any process that would stop collection calls and legally discharge a debt owed other than bankruptcy. While a collector of a debt may be temporarily dealt with there is nothing that I can see that would prevent the debt collector from returning that debt to the debt owner and it being assigned out to another party or sold on.
I reached out to Jason Pestritto, the sender of the email from Phoenix Marketing Managers for additional information.
I was interested in data supporting claims they made about the effectiveness of the product for clients enrolled to date and the cost of program.
I was also interested in a clarification of the statement that an FDCPA attorney is going to sue third party debt collectors for calling consumers. I felt as if they might be hanging their hat on sending cease & desist letters but wondered how is that an effective strategy in dealing with the underlying debt?
I also asked what percentage of all enrolled debt is forgiven or is any debt actually forgiven using this program?
In response, the only comment I received from the company by the time of publication was, “Once the original creditor transfers the debt the debt is paid in full and our process proves that.”
Huh?
That statement makes me skeptical and prompts further digging. Here we go.
Phoenix Marketing Managers says it is located at:
28641 Marguerite Pkwy, Ste C11
Mission Viejo, CA 92692
It’s website of phoenixmarketingmanagers.com was registered just less than four months ago on September 20, 2011.
A search of California registered companies could not find Phoenix Marketing Managers registered to do business in California.
What is even more interesting is that Phoenix Marketing Managers appears to not be a company that has debt relief expertise. They are a marketing and lead generation company. – Source
Here is the pitch email I received:
Debt Dispute Vs. Debt SettlementLooking for an alternative to Debt Settlement that returns your profits to pre-regulation levels?
We offer a financial auditing service that is not considered debt relief but yields the same results in about sixty days! You will have more clients than you know what to do with utilizing our attorney backed model to invalidate client debt permanently.
Our services are less expensive than Debt Settlement and offer a more aggressive payout plan that will return your income to levels to pre October 27, 2010.
If you are looking for a service to make more money in 2012, you owe it to yourself and your sales team to take a very close look at our process.
Highlights and Features of Debt Dispute:
- Six month program includes debt invalidation and credit restoration
- Attorney backed model and dispute documents signed by our attorney and notarized
- Most effective alternative to bankruptcy, debt settlement and debt consolidation or counseling
- Simple and automated client management software system
- Streamlined backend processing
- All dispute paperwork is time and date stamped and tracked through USPS to ensure delivery
- Partnership with nationwide FDCPA attorney network for added client protection. If your client continues to receive phone calls from third party debt collectors, our attorney network sues them for each infraction. Client can literally be reimbursed for our fees through these suits.
- Least expensive relief option available anywhere
- Full service program-We do all the work
- Client has the ability to monitor their own progress through our website portal
- Collection agency helpless to prove client owes anything
- Our merchant handles all autodrafts and automatically disperses funds through direct deposit-no waiting for a paycheck.
- Training materials and updates available through our affiliate back office login tab
- Dispute program now has a thirteen year record of proven success
- No fear for the client receiving 1099C on unpaid balances
- Nine different consumer protection laws woven together produced a bulletproof system not only for the client but for your long term success!
Rather than answer my questions further, Phoenix Marketing Managers said Sarah Young of Debt Defense Services was the person to ask for additional information.
DDS (Debt Defense Services) says they are “NOT a debt settlement, modification, or negotiation service.” – Source
Debt Defense Services says they are located at:
1212 York Road
Building B
Suite 301
Timonium, Maryland 21093
PHONE: (443) 320-2443
FAX: (888) 363-8855
According to State of Maryland records Debt Defense Services, LLC was formed on January 17, 2011. – Source
Debt Defense Services also says they are a company of 51-200 employees and were founded in 2010. – Source
John Rodriguez is also identified as a co-founder of Debt Defense Services. – Source
M. Wingate Pritchett, Esq. is also said to work with Debt Defense Services. – Source
A search of domain records says the domain is owned by Mike Unger at 2301 Furnace Road, Fallston, MD. It is the same address used in the company registration documents. – Source
Debt Defense Services says their customer service department can be reached via fax at an 813 area code number. – Source. 813 is typically a Florida number that covers all of Hillsborough County, the eastern two-thirds of Pasco County, and the city of Oldsmar in Pinellas County.
I followed the process that I suggest in How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off and looked to see if the company was listed with the BBB. They were not.
Just before publication of this article I heard from yet another partner in Debt Defense Services, Scott Solomon. How many partners are there? You’d never know from looking at their website.
Scott did share some more detailed information about the Debt Defense Services process. He said:
We offer several services with our dispute process including creating the commercial record through the actual dispute paperwork which does include the cease and desist that our affiliates at Krohn and Moss handle when our clients are violated.
Obviously this does not achieve our ultimate goals but it does give our clients the piece of mind knowing that if they do still have to deal with collection agencies harassing them after the cease and desist is received someone is going to deal with it at the highest level.
The time line of our process is about 90 days at which time the typical results are that the collection agencies either sends the file back to the original creditor, sells it to another agency or simply closes the file.
None of our clients have been sued, and that includes 100’s of cases disputed. After the 90 days our clients are enrolled in credit restoration with our affiliates at Top Score Services which is included in our fees.
The fee schedule for our services ranges from 35% for lower end debt totals to 20% for higher end debt totals. Our dispute process is a collaboration of federal laws with the FDCPA being only one.
I asked for clarification if the fee was based on debt enrolled or debt forgiven. But since they say that no debt is forgiven, the logical conclusion is that for affiliates to make “pre-regulation” income, it is probably on debt enrolled. Sarah Young stated it was based on “alleged debt.”
It is interesting to note that the email from Jason Pestritto claims the debt is dealt with in 60 days and Solomon says their process is 90 days. It’s a small discrepancy but it makes me wonder if there is one set of valid performance numbers any of these companies can offer up to support definitive claims.
ACTION ITEM: I would urge anyone considering using these services to follow this step in my guide How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off:
Ask the Company to Put Their Performance Claims in Writing. If a representative is willing to tell you they have a great success rate for the services they are selling, then they should not hesitate to share that data with you. In fact the Federal Trade Commission has some very clear guidance about how a company should do that.
The fees allegedly charged by Debt Defense Services are sure to bring regulator interest and attention. They are huge.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
As a side note, in my research for this article I had previously come across the company Top Score Services, a credit repair company, and here it is mentioned again by Solomon. – Source
Top Score Services is owned by Salvatore Pestritto and T. Jason Pestritto. I wonder if it is the same Jason Pestritto this all began with? – Source, Source
In my opinion, dealing with resolving all problem debt simply through validation is an incomplete tactic to address the entire debt situation. There have been numerous issues with debt buyers and even some original creditors taking action on debt without being able to support their claims. And while some debt collectors will run afoul of the Fair Debt Collection Practices Act and may be subject to violations, not all do.
Finally, this impression that consumers can pay 20%-35% of their debt and enroll into a program that is going to permanently wipe out their debt in 60-90 days is entirely problematic and most likely lead to unhappy consumers and complaints to regulators.
The mass debt invalidation approach has been tried before and certainly didn’t work for Hess-Kennedy. In fact that approach wound up with attorneys disbarred and people charged.
Only time will tell what will happen here.
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.
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It’s quite obvious dds is a scam.
Answer the questions Sarah. What % of your company’s clients have a significant portion of their debt relieved?
Hello Steve,
Now that I am back from my business trip and have a few moments to address the false and erroneous information you have published regarding Debt Defense Services, it is a great time to set the record straight. Debt Defense Services is NOT a debt relief program nor does Debt Defense Services negotiate or settle anything for anyone. Your reference to Hess-Kennedy is absurd-they are/were a debt settlment company. When you originally contacted me you were under duress to hurry up and publish an article the very next day. And in the following email conversation stream, your readers can see how impatient and panicked you were to get all of the answers in one day (out of the blue) which would not do our program justice. You also refused to call me or my president nor would you provide a phone number for yourself. (Strange) This is very odd considering you promote yourself as a professional journalist. Professional journalists do diligent research from all mediums, not just emails in a forty-five minute time span. In your case you weren’t actually writing an article, you were asking me and my staff to write it for you. Then you published incorrect data without permission.
Email stream:
Kindly provide your contact number and you will hear from me. Always with kind regards, Sarah M. YoungFounding PartnerDebt Defense Services, LLCDirect: 410-206-8669Fax: 813-412-3239www.debtdefenseservices.orgSkype: debtdefense4u NOT Bankruptcy/NOT Debt Settlement ——– Original Message ——–Subject: Re: Reporter on 1-12-2012 DeadlineFrom: Help Date: Thu, January 12, 2012 10:26 amTo: sarah@debtdefenseservices.orgJason said you were the one in charge.
On Thu, Jan 12, 2012 at 10:25 AM, wrote:What is the reason you are not responding to Mr. Solomon? Always with kind regards, Sarah M. YoungFounding PartnerDebt Defense Services, LLCDirect: 410-206-8669Fax: 813-412-3239www.debtdefenseservices.orgSkype: debtdefense4u NOT Bankruptcy/NOT Debt Settlement ——– Original Message ——–Subject: Re: Reporter on 1-12-2012 DeadlineFrom: Help Date: Thu, January 12, 2012 10:15 amTo: sarah@debtdefenseservices.orgIt is not clear. Is that of debt enrolled or debt forgiven?
Steve
On Thu, Jan 12, 2012 at 10:13 AM, wrote:Here are our fees as outlined by Mr. Solomon: “The fee schedule for our services ranges from 35% for lower end debt totals to 20% for higher end debt totals.” You are invited to contact Mr. Solomon for more detail at his direct number also in his recent email.
Always with kind regards,
Sarah M. Young
Founding Partner
Debt Defense Services, LLC
Direct: 410-206-8669
Fax: 813-412-3239
http://www.debtdefenseservices.org
Skype: debtdefense4u
NOT Bankruptcy/NOT Debt Settlement
——– Original Message ——–
Subject: Re: Reporter on 1-12-2012 Deadline
From: Help Date: Thu, January 12, 2012 10:05 amTo: sarah@debtdefenseservices.orgWhere does it include what your fees are?
On Thu, Jan 12, 2012 at 10:02 AM, wrote:Steve, So you didn’t get the extensive explanation that my partner sent you last evening?
Always with kind regards,
Sarah M. Young
Founding Partner
Debt Defense Services, LLC
Direct: 410-206-8669
Fax: 813-412-3239
http://www.debtdefenseservices.org
Skype: debtdefense4u
NOT Bankruptcy/NOT Debt Settlement
——– Original Message ——–
Subject: Re: Reporter on 1-12-2012 Deadline
From: Help Date: Thu, January 12, 2012 9:52 amTo: sarah@debtdefenseservices.orgCan you at least share the cost of your program?
You must not work with the press much.
The article is publishing. I’d rather have you be heard in it. If you don’t want to comment or provide information I’ll run with that.
Certainly requests for how effective your services are should be information held right at hand.
Steve
On Wed, Jan 11, 2012 at 7:23 PM, wrote:Steve, ALL information you would get from us must be approved by our legal counsel and you should not publish information without proper authorzation. Your deadline is tomorrow and it’s unclear why you have waited until the last minute to ask for such information. Our legal counsel would not have time to review what you wish to write anyway. There is no debt. We are a financial auditing company. We would be happy to go over our information for a future publication.
Always with kind regards,
Sarah M. Young
Founding Partner
Debt Defense Services, LLCDirect: 410-206-8669Fax: 813-412-3239
http://www.debtdefenseservices.org
Skype: debtdefense4u
NOT Bankruptcy/NOT Debt Settlement
——– Original Message ——–
Subject: Re: Reporter on 1-12-2012 Deadline
From: Help Date: Wed, January 11, 2012 6:28 pmTo: sarah@debtdefenseservices.orgDid you miss my questions”
>>> Working on piece about debt dispute product you are promoting and would
>>> like to get some data from you supporting claims made about the
>>> effectiveness of the product for clients enrolled to data and cost of
>>> program.
>>>
>>> Also, can you please clarify your statement that an FDCPA attorney is
>>> going to sue third party debt collectors for calling consumers. It seems as
>>> if you might be hanging your hat on sending cease & desist letters but how
>>> is that an effective strategy in dealing with the underlying debt?
>>>
>>> What percentage of all enrolled debt is forgiven? Or is any debt
>>> actually forgiven using this program?
I’d hate for the article to incorporate your last response as the DDS only quote.
Steve
On Wed, Jan 11, 2012 at 5:33 PM, wrote:Greetings Steve, We do not wish to be published in an article but thank you for the offer. We have our own marketing strategies in place. Always with kind regards, Sarah M. YoungFounding PartnerDebt Defense Services, LLCFax: 813-412-3239www.debtdefenseservices.orgSkype: debtdefense4u NOT Bankruptcy/NOT Debt Settlement ——– Original Message ——–Subject: Reporter on 1-12-2012 DeadlineFrom: Help Date: Wed, January 11, 2012 5:14 pmTo: customerservice@debtdefenseservices.orgHi,I’m working on an article I plan to publish on 1-12-2012 that appears tonow involve you.Can you please answer the questions I posed to Jason that he was unable toanswer, please.Also a bit confused the fact your customer service fax number is located inFlorida. It does not appear you have a registered office in Florida.Steve
Kindly provide your contact number and you will hear from me.
Always with kind regards,
Sarah M. Young
Founding Partner
Debt Defense Services, LLC
Direct: 410-206-8669
Fax: 813-412-3239
http://www.debtdefenseservices.org
Skype: debtdefense4u
NOT Bankruptcy/NOT Debt Settlement
——– Original Message ——–Subject: Re: Reporter on 1-12-2012 DeadlineFrom: Help Date: Thu, January 12, 2012 10:26 amTo: sarah@debtdefenseservices.orgJason said you were the one in charge.
On Thu, Jan 12, 2012 at 10:25 AM, wrote:What is the reason you are not responding to Mr. Solomon? Always with kind regards, Sarah M. YoungFounding PartnerDebt Defense Services, LLCDirect: 410-206-8669Fax: 813-412-3239www.debtdefenseservices.orgSkype: debtdefense4u NOT Bankruptcy/NOT Debt Settlement ——– Original Message ——–Subject: Re: Reporter on 1-12-2012 DeadlineFrom: Help Date: Thu, January 12, 2012 10:15 amTo: sarah@debtdefenseservices.orgIt is not clear. Is that of debt enrolled or debt forgiven?
Steve
On Thu, Jan 12, 2012 at 10:13 AM, wrote:Here are our fees as outlined by Mr. Solomon: “The fee schedule for our services ranges from 35% for lower end debt totals to 20% for higher end debt totals.” You are invited to contact Mr. Solomon for more detail at his direct number also in his recent email.
Always with kind regards,
Sarah M. Young
Founding Partner
Debt Defense Services, LLC
Direct: 410-206-8669
Fax: 813-412-3239
http://www.debtdefenseservices.org
Skype: debtdefense4u
NOT Bankruptcy/NOT Debt Settlement
——– Original Message ——–
Subject: Re: Reporter on 1-12-2012 Deadline
From: Help Date: Thu, January 12, 2012 10:05 amTo: sarah@debtdefenseservices.orgWhere does it include what your fees are?
On Thu, Jan 12, 2012 at 10:02 AM, wrote:Steve, So you didn’t get the extensive explanation that my partner sent you last evening?
Always with kind regards,
Sarah M. Young
Founding Partner
Debt Defense Services, LLC
Direct: 410-206-8669
Fax: 813-412-3239
http://www.debtdefenseservices.org
Skype: debtdefense4u
NOT Bankruptcy/NOT Debt Settlement
——– Original Message ——–
Subject: Re: Reporter on 1-12-2012 Deadline
From: Help Date: Thu, January 12, 2012 9:52 amTo: sarah@debtdefenseservices.orgCan you at least share the cost of your program?
You must not work with the press much.
The article is publishing. I’d rather have you be heard in it. If you don’t want to comment or provide information I’ll run with that.
Certainly requests for how effective your services are should be information held right at hand.
Steve
On Wed, Jan 11, 2012 at 7:23 PM, wrote:Steve, ALL information you would get from us must be approved by our legal counsel and you should not publish information without proper authorzation. Your deadline is tomorrow and it’s unclear why you have waited until the last minute to ask for such information. Our legal counsel would not have time to review what you wish to write anyway. There is no debt. We are a financial auditing company. We would be happy to go over our information for a future publication.
Always with kind regards,
Sarah M. Young
Founding Partner
Debt Defense Services, LLCDirect: 410-206-8669Fax: 813-412-3239
http://www.debtdefenseservices.org
Skype: debtdefense4u
NOT Bankruptcy/NOT Debt Settlement
——– Original Message ——–
Subject: Re: Reporter on 1-12-2012 Deadline
From: Help Date: Wed, January 11, 2012 6:28 pmTo: sarah@debtdefenseservices.orgDid you miss my questions”
>>> Working on piece about debt dispute product you are promoting and would
>>> like to get some data from you supporting claims made about the
>>> effectiveness of the product for clients enrolled to data and cost of
>>> program.
>>>
>>> Also, can you please clarify your statement that an FDCPA attorney is
>>> going to sue third party debt collectors for calling consumers. It seems as
>>> if you might be hanging your hat on sending cease & desist letters but how
>>> is that an effective strategy in dealing with the underlying debt?
>>>
>>> What percentage of all enrolled debt is forgiven? Or is any debt
>>> actually forgiven using this program?
I’d hate for the article to incorporate your last response as the DDS only quote.
Steve
On Wed, Jan 11, 2012 at 5:33 PM, wrote:Greetings Steve, We do not wish to be published in an article but thank you for the offer. We have our own marketing strategies in place. Always with kind regards, Sarah M. YoungFounding PartnerDebt Defense Services, LLCFax: 813-412-3239www.debtdefenseservices.orgSkype: debtdefense4u NOT Bankruptcy/NOT Debt Settlement ——– Original Message ——–Subject: Reporter on 1-12-2012 DeadlineFrom: Help Date: Wed, January 11, 2012 5:14 pmTo: customerservice@debtdefenseservices.orgHi,I’m working on an article I plan to publish on 1-12-2012 that appears tonow involve you.Can you please answer the questions I posed to Jason that he was unable toanswer, please.Also a bit confused the fact your customer service fax number is located inFlorida. It does not appear you have a registered office in Florida.Steve
Big comment but what part of the post are you claiming is inaccurate? It’s not clear from your information in your comment.
While many think Hess-Kennedy was primarily a debt settlement company, that is in fact not the foundation of their efforts. Hess-Kennedy was challenging debts and using FDCPA and validation as their primary tools.
“The Chase and state suits make essentially the same claims. They say Hess Kennedy and the affiliated Consumer Law Centers in Boca Raton and Delray Beach, Fla., falsely told customers that their credit card companies had violated the federal Fair Credit Billing Act. The law firm or the customers then wrote letters to credit card companies disputing all charges. In a Feb. 21 news release, McCollum said Hess and related companies falsely told clients that they “did not have to pay creditors and creditors could not sue or otherwise take action against them” once the letters were sent to credit card companies claiming FCBA violations. Chase’s federal court suit said defendants misled card members into believing they can stop payments on debts dating back years “until Chase investigates and resolves the purported ‘billing error disputes’ to their satisfaction.” – Source
“The lawsuit against Laura Hess was filed by the Attorney Generals Economic Crimes Division and named Hesss Broward County law firm and several other Florida-based companies she controlled. The lawsuit accused Hess of signing thousands of credit card debtors up for debt management services and claiming the law firm would provide legal services to cancel debts for pennies on the dollar. Representatives of Hess allegedly told consumers that the companies had audited the consumers accounts and found numerous violations under the Fair Credit Billing Act, then sent notices to creditors disputing all charges. Consumers were falsely told that once these notices were issued, the consumers did not have to pay creditors and creditors could not sue or otherwise take action against them. This deception led to lawsuits and other actions against several debtors.” – Source – Florida Attorney General
Then, as when I wrote the story, as now, if there is some fact in the story that is wrong or needs clarification I welcome the update. Feel free to post it in the comments.
I also noticed that in the email exchange you posted it reminded me you never answered my original questions of:
1. [I’d] like to get some data from you supporting claims made about the effectiveness of the product for clients enrolled to data and cost of program.
2. Also, can you please clarify your statement that an FDCPA attorney is going to sue third party debt collectors for calling consumers. It seems as if you might be hanging your hat on sending cease & desist letters but how is that an effective strategy in dealing with the underlying debt?
3. What percentage of all enrolled debt is forgiven?
4. Or is any debt actually forgiven using this program?
5. Also a bit confused the fact your customer service fax number is located in Florida. It does not appear you have a registered office in Florida.
Can you please answer them in the comments?