An amazing reader, Jessica, sent in a new debt relief mailer through my I Buy Junk Mail program.
These mailers promising all sorts of relief that try to appear as some sort of official notification are still going out to consumers. The mailers are problematic in my opinion because they state benefits without much information to fill people in about what is going on.
As you will see below, the benefits promised are:
- No 3rd Party Fees
- 1 Payment per Month
- Immediate Reduction of Payments up to 70%
- Avoid Costly Debt Management Programs
- Credit is Restored by Avoiding Bankruptcy
- Stop Calls from Creditors & Collectors
But here is what I think is missing from the mailer bullet points.
No 3rd Party Fees – There may be no third-party fees but that does not say there will not be any fees. Typically third-party fees are paid to keep consumers money safe in an escrow account. That is unless this is some sort of attorney or legal service, then it would be held in an attorney trust account. But if this was the case then the mailer would say this was legal advertising and it does not.
1 Payment per Month – While the mailer promises one payment per month it doesn’t say how that payment may be allocated or divided up. Odds are this payment does not go to the creditor on a monthly basis. That’s the typical outcome.
Immediate Reduction of Payments up to 70% – In a debt settlement, debt invalidation, or some other debt intervention type of approach the sales people often promise reduced payments but what they don’t say is this is not in cooperation with the creditors. The payment reduction is basically an arbitrary number that is pulled out of the air to make people feel like they are paying less to their creditors. You can test this yourself by telling the sales person you can’t afford the first payment amount they give you. They’ll come back with another one. Usually the companies are paying nothing to the creditors and whatever payment is being made is held until the account is significantly delinquent and/or there is enough money accumulated, after fees, to offer a settlement to the creditor.
Avoid Costly Debt Management Programs – But it seems pretty clear this program has fees and is a debt management program. Additionally, the mailer never gives readers any idea of what the fees will be so how can anyone make a determination or promise about costly?
Credit is Restored by Avoiding Bankruptcy – What the mailer doesn’t say is that bankruptcy is very often the least expensive and fastest way to restore credit and recover from a debt problem. Don’t believe me? Then read what the Federal Reserve has to say on the matter, Those That File Bankruptcy Do Better Than Those That Don’t. What this bullet item also doesn’t mention is if your creditors are not going to get monthly payments then your account will be delinquent and that will be reported on your credit report for up to seven years. So how is credit restored? Ask.
Stop Calls from Creditors & Collectors – Interesting claim, but how? One way might be if you were being represented by an attorney but from the looks of the mailer it is not for attorney services. And while an attorney may represent you, people are often better establishing an attorney-client relationship with a local attorney and not with a national legal firm. You need to learn about the debacles of such firms like Legal Helpers and Morgan Drexen. If this is not a legal service than the debt relief company has no control and authority to stop any calls from the original creditor.
Then there are some concerns over the reduction of debt shown. The claims probably do not include fees and growing balances and certainly are not demonstrably backed up with any data. As far as the estimate number is concerned I see it no more than some number pulled out of the air.
And then there is the very problematic number of how much debt the consumer has. Several lawsuits are ongoing right now against debt relief companies who are alleged to have pulled such data from consumer credit reports, without proper permission. See this article and this one.
As always, I urge all consumers contemplating using a debt relief company to just do some basic homework, ask questions, and understand your options, before leaping at any offer.
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This offer was able to be reviewed because a kind reader sent it in via my I Buy Junk Mail program.
If you receive a credit or debt relief offer in the mail, do some good and let me pay you for it. Click here.
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