A reader brought North American Debt Relief to my attention. It seems like a great opportunity to bring back our “Do They Comply” game.
If you are not aware, “Do They Comply” is our game where we take a look at the website or claims of a debt relief company and comment about how you feel they are doing with adhering to acceptable debt relief industry standards.
According to the North American Debt Relief website, they claim:
- they can help people avoid bankruptcy,
- make one low monthly payment,
- help people to be debt free in 18-36 months,
- and reestablish credit and credit score.
On another page they also claim to stop harassing phone calls, help you to become debt free fast, get you debt free in 15-36 months and reduce your debt by 50-75 percent. – Source
They also make a lot of representations that they have been seen on a wide variety of mainstream media outlets. But what they don’t make clear is if these appearances are advertising or coverage. A search of some of the sites they claim to have been seen on could locate no such appearances in stories or coverage.
So what do you think, is using the logos of those media outlets on an “as seen on” basis deceptive?
You can see and hear the claims North American Debt Relief makes on their home page, in the video below. Pay attention to the claims on the very top and the logos scrolling across the screen on the bottom of this snapshot.
The site makes claims of 50% debt reductions and their online calculator shows a reduction to be expected of about 46 percent. But follow the red arrow section and that’s where the disclaimers are located, in a font that makes it hard to read.
Here is what the hard to read disclaimer actually says: “Individual results may vary and are dependent upon several factors including individual circumstances, creditors’ willingness to settle, successful completion of program and ability to save funds. North American Debt Relief’s Settlement Program does not assume or pay any debt, nor does it provide legal advice or offer credit repair. Settlement estimates of 50% are examples of prior settled accounts and do not take into consideration our service fees or potential tax consequences.”
So their claims don’t involve fees. Does that mean their claimed settlement percentages are not really as they claim then? What do you think, would a consumer understand that?
And what are the fees? I can’t find them listed on the site.
Their debt settlement samples page is interesting as well. They show four letters to serve as samples but the letters are from 2006-2007. Nothing current. Are they representative of current settlements? – Source
The company claims to be located in Arizona at:
North American Debt Relief, LLC.
7720 E. Evans Rd.
Suite 104
Scottsdale, AZ 85260
But according to Arizona corporate records the company is actually located at:
12425 N 80th Place
Scottsdale, AZ 85260
North American Debt Relief was formed in Arizona on February 10, 2010. The members are Todd Sibel and Jeff Schaeffer. Even thought North American Debt Relief claims to be “legal service” (source), neither Todd Sibel or Jeff Schaeffer could be found as members of the State Bar of Arizona.
Your Turn
Post your comments below about the marketing messages this company offers. Do you think the are fair and reasonable or maybe deceptive and confusing? What about the claim the company says, “North American Debt Relief is an attorney based debt settlement company” yet the managing members do not appear to be lawyers in Arizona, where they are located?
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I agree that this website is very deceptive. Displaying simple statistics is one thing, but representing total program cost, especially in comparison to other alternatives requires that all cost factors be included. In addition to the point you make, this cost calculation does not account for the balance increase prior to settlement. Since settlements are always based upon current balance, not original balance, cost comparisons must include added interest. Our experience is that balances, on average, increase by 25% by time of settlement, so in the example above, the settlement estimate should be based upon 125% of the original balance (or more, if their data indicates it). The other deception based upon the FTC comments is that their disclaimer indicates that they are using selected examples of prior settlement to arrive at their 50% settlement percentage. The FTC clearly states that the numbers you use must be objectively determined and provable from your actual client data.