Quick Answer: American Debt Control and similar debt settlement companies are generating complaints due to questionable practices, with Debt Relief USA recently filing bankruptcy after allegedly violating state laws and leaving 2,500 customers worse off financially. American Debt Control has earned an F rating from the BBB for issues including failure to contact creditors as promised.
Interesting article worth reading out of Texas about debt settlement and the Debt Relief USA mess.
People in desperate financial straits will sometimes go to desperate lengths to get out. And some companies use questionable practices to capitalize on their plights.
The most recent example is an Addison-based company that promised to cut consumers’ credit card debt, but instead charged hefty fees in violation of state law, according to the Texas attorney general’s office.
Most money news tells you what happened. I tell you what to do about it.Every weekday I read the enforcement actions, filings and fine print the outlets skip, and turn them into the one or two moves that actually improve your position — a rate worth moving for, a fee you can refuse, a deadline to beat before it costs you.
In the latest issue (Sep 15): A number you don’t look at is not an asset
I write Your Money Actually most weekdays — actionable money information you will not find anywhere else, and the small decisions that compound. It is free, I sell nothing, and I take no money from any company I write about.
The company, Debt Relief USA, has filed for bankruptcy, leaving thousands of clients without promised help and many in worse financial shape than when they started, state officials say.
Investigators say they are working to recover an estimated $4.6 million that the company withheld from about 2,500 customers in Texas and other states.
“We are working through the bankruptcy court to get money for the people who paid for their services,” said Tom Kelley, a spokesman for the attorney general.
Another of the debt settlement companies, American Debt Control in Grapevine, has earned an F from the bureau because of, among other things, the number of consumer complaints. Those include not contacting clients’ creditors, a key part of the service. The BBB also reports that the company operates in some states that prohibit for-profit debt settlement services from soliciting customers.
Read the entire article ‘Use of Debt Settlement Firms May Be Unnecessary, Unwise‘ online.
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Before You Sign Anything: Run any debt relief contract through the free Contract Decoder to spot hidden fees and unfair terms. Check the company’s complaint history with the Scam-O-Meter.
Compare Your Real Options: Most debt relief companies won’t tell you about all your options — especially the ones they can’t profit from. Credit counseling has a 21-27% completion rate. Settlement resolves about 1% of enrolled debts fully. Bankruptcy has a 95% discharge rate — and protects your retirement. Take the Find Your Path quiz for a recommendation based on your actual numbers.
