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A tipster (send in your tips here) sent me a fee schedule from the non-profit credit counseling group Military Debt Management Agency (MDMA) in Florida.

The reader was concerned that this non-profit 501(c)3 IRS approved charity that is supposed to be helping military members and general consumers was taking advantage of those with federal government student loan debt, by charging steep fees for services military members and consumers could get for free.

The reader said:

I got the materials, and basically it looks like they are charging people in student loan debt $400-$1000 to do consolidations and income based repayment programs.. These programs are available online to do for FREE.

It bothers me to think that these guys are insinuating to people that this is how you deal with your student loans – when going to loanconsolidation.ed.gov will do the same thing for absolutely free.

I have no idea how a “nonprofit” charges such ridiculous fees for a service that is free. If they really wanted to help people, wouldn’t they just do it without charging that much since they are a nonprofit? The sales guys I heard on the conference call sounded more like the typical debt settlement crowd concerned with making their upfront enrollment fees.

It would be interesting if you could figure this out. The fees are paid upfront. I question their connection to the Department of Education due to the high fees they are charging. I don’t see the DOE going along with this just to line the pockets of a “nonprofit”.

So I took on the challenge.

If the allegations are true, which I will examine here, the non-profit charity is charging clients an exorbitant amount of money for help the military member or consumer can do for free directly through the Department of Education or their loan servicer.

This is the fee schedule I was sent by the tipster.

The document does appear to not only charge fees for student loan services but also an advance enrollment fee before any services are delivered.

Military Debt Management Agency

MDMA is a member of ACCPROS (Association of Credit Counseling Professionals) and states they are a BBB A+ Accredited Business. – Source

MDMA provides the following description about themselves:

Military Debt Management Agency is a non-profit charitable organization that was organized in the fall of 1997. Originally it was formed to assist military personnel in obtaining previously denied security clearances. Additionally MDMA’s mission is to provide personal budget counseling, credit education, and affordable debt management programs to active duty and retired military personnel.

At that time our goal was simple: To improve the quality of life to those who serve our country. Now that we have opened our debt management programs to the civilians sector, our mission is still a simple one:

To improve your quality of life and peace of mind through financial security and understanding.

Our core program consisted of consolidating credit card accounts, lowering interest rates, eliminating costly monthly fees, and bringing past due accounts current. Our customer service initiative was to have the utmost respect for all clients and to provide the most personal and comprehensive credit counseling program in the nation.

Throughout the years our program has evolved as the needs of our customers have grown. Currently MDMA offers a wide variety of credit related services. We offer low cost credit reports and analysis. We negotiate settlement plans for past due and charged off bad debt. Our budget counseling program has been modeled after the military’s own personal financial management (PFM) program, and our consolidation program continues to assist military members in receiving or retaining their top secret security clearances. – Sourcee

It appears that from their own description they are one of the few non-profit credit counseling agencies that are offering a debt settlement service as well. It is odd though that they appear not to offer settlement services for problem debts with the original creditors though. Why not? But that’s probably the subject of another article though.

The MDMA student loan services page starts with a picture of President Obama and a video.

MDMA then states, “Military Debt Management Agency works with the Department of Education to help consolidate your Federal Student Loans.” – Source. This makes it seem as if they have some special arrangement with the Department of Education.

They then describe the service they will offer:

Once our counselors determine your eligibility and approximate payment, they will gather all the necessary information needed for the consolidation and send out all agreements and forms for your signature. From there our underwriting department will review your file and send it to Department of Education for final approval. From there the Department of Education will approve the consolidation, sending you a new promissory note to be signed and sent back and then your consolidation is done, and you’ll begin making payments at the lower amount. It’s that easy.

But here is where it gets interesting or disturbing for me. You see, the services they are offering for an alleged fee of upwards of $1,000 to military members and consumers, can actually be obtained for free just by telling people to go to this Department of Education website directly.

I was critical recently of another company that was charging fees for this service, see Broadsword Student Advantage Sells People Student Loan Help They Could Get for Free. My concern about this issue is not with MDMA in particular but with companies, that in my opinion, are taking advantage of people by charging fees for services the consumer could tackle directly for no fee.

I have no problem with any company charging a fee for this service if consumers are clearly told they could do it themselves and then make a fully informed and educated decision to not do it and then pay someone to do it for them as a service.

But on the MDMA website, they appear to provide no such disclaimer nor any direct link to the Department of Education site. You would think as a charity and if they have a relationship with the Department of Education they would know how to direct people there.

My Secret Shopper Call

I called Military Debt Management Agency and asked them about their service. You can hear the call below.

MDMA Secret Shopper Call

During the call the very nice representative tells me about their A+ BBB rating.
Tells me I may be eligible to get portions of my student loan debt forgiven.
They said they have a close relationship with the Department of Education.
Loan payments are determined by underwriters.
There is a fee for the underwriting services.
Normally the fee is $599.
The underwriting fee sounded like it is from the Department of Education.
The underwriting fee can be broken up in split payments as shown on the alleged fee schedule sent in by reader.
MDMA can take my application for student loan consolidation and get the results back within the hour.
They never offered me the ability to consolidate loans for free directly with the Department of Education.
I asked why I should not go to the Department of Education directly and she put her manager on.
The manager, Henry Green, said I could go to the Department of Education directly but that MDMA could provide a better service and get better results.
He tells me that even though I am no longer in the military they will submit a 120 payment student loan forgiveness plan. (That appears to not be what the Department of Education guidelines say since I said I was out of the military. “You must be employed full-time by a public service organization when you make each of the required 120 qualifying monthly payments on your Direct Loans, at the time you apply for loan forgiveness after making the last of those 120 payments, and at the time you receive loan forgiveness.” – Source)
I have to pay underwriting fee.
They will hit a debit card over the phone for the underwriting fees.
They wanted my student loan PIN number.
They could get my personal PIN if I didn’t have it.

The MDMA Student Loan Consolidation Application

After the call I sent Military Debt Management an email to ask if there was a monthly fee associated with their program. They did not answer that question. In response all I received was the student loan consolidation application below.

One critical item that is missing from the application is anything relating to the terms and conditions of the program. Innocent military member and consumers who fill out this form and return it will be giving over sensitive information without any awareness of the terms of the program. That’s just foolish.

When pressed for the program terms, Henry Green responded, “First I would need the application in order to view your loans and make sure they all qualify.” He sent the MDMA student loan application back again instead.

However, after pressing for an answer yet again, I was told, “No, after the 599.00 fee there no other charges or fees.” I still did not receive any program terms and conditions I would be required to sign.

More About Military Debt Management Agency

The BBB listing for MDMA (Source)and the MDMA website (source) says they are located at:

39 Maple Ave
Shalimar, FL 32579-1132

But according to State of Florida records it appears the current address is actually:

210 North University Drive
#501
Coral Springs, FL 33071 – Source

210 N University Dr, Coral Springs, FL 33071

The email I received from Henry D. Green, Supervisor Student Loan Division of MDMA, says the address is:

3773 NW 126th Avenue
Suite 3
Coral Springs, FL 33065

3773 NW 126th Avenue, Coral Springs, FL 33065

That happens to be the same location as Student Loan Consolidators, LLC, a for profit Florida company that was organized on July 16, 2012 and reports its founding members are Ira Frazer and Scott Haberman. – Source

Student Loan Consolidators, LLC appears to not have any website.

The company also says their mailing address is not in Florida but 2770 Harbor Blvd, Santa Ana, California. That address was also the same one used by Consumer Affairs Law Center that was working with Legal Helpers Debt Resolution that was sued by the State of Illinois.

Both Frazer and Haberman have appeared on this site before. See here and in comments here.

The current officers for Military Debt Management Agency are reported by the State of Florida as: Jerry Simonds, BT Breazeale II (B. Thomas Breazeale – Source), Nicholas Petersen, William Van Hoesen, Mary Ester, Robert Foley, and Christopher Young. – Source

FixStudentLoans.org

In my research for this article I stumbled across fixstudentloans.org which is a site promoting student loan consolidation services. The site says they are associated with MDMA, “Fix Student Loans, 210 N. University Drive, Suite 501, Coral Springs, FL 33071 Email: dalberts@militarydebt.org, Phone: 800-323-3343 Copyright © 2011-2013 Military Debt Management Agency.” – Source

You will notice the site also uses the same President Obama video.

But what is most interesting about this site is that it is publicly reported as being personally owned by Tom Breazeale (bigtom1@cox.net) and not MDMA. The site was registered on January 23, 2012. The record was last updated on January 24, 2013.

And according to public records, Tom Breazeale personally, not not the charity, owns the following domain names as well:

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ABOUTMYCREDIT.ORG
FIGHTFORFAMILIESMMA.COM
FIGHTFORFAMILIESMMA.ORG
FIGHTING4FAMILIES.ORG – Site sells MDMA services and solicits donations.

FIGHTING4FAMILIESMMA.COM
FIGHTING4FAMILIESMMA.ORG
FIGHTINGFORFAMILIESMMA.COM
FIGHTINGFORFAMILIESMMA.ORG
FIX-STUDENT-LOANS.COM
FIX-STUDENT-LOANS.NET
FIX-STUDENT-LOANS.ORG
FIXSTUDENTDEBTS.ORG
FIXSTUDENTLOANS.NET
FIXSTUDENTLOANS.ORG
HONORCARD.ORG
MDMAINFO.COM
MDMAINFO.ORG
18MMSHQ.COM
MYHONORCARD.ORG
MYMILITARYCARD.COM
MYMILITARYCARD.ORG
STUDENT-LOANS-FIXED.COM
STUDENTDEBTSFIXED.COM
STUDENTLOANSFIXED.COM
STUDENTLOANSFIXED.NET
STUDENTLOANSFIXED.ORG
THEMILITARYCARD.COM
THEMILITARYCARD.ORG
USHONORCARD.COM
YOURFINANCIALANSWERS.COM

Wow

I’ve got to say, for a charity that prominently claims to be about “Improving the quality of life one member at a time.” This program stinks and seems to fly in the face of what is in the best interest of the military member or consumer.

I would recommend that anyone considering using such a company should read the following fee guides.

Sincerely,

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.

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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.