Being elbows-deep in debt is a scary thing, so when a service tells you that you can “become debt free and enjoy financial independence” and that it can reduce how much you owe by “70 to 80 percent on average including all fees,” it might be tempting to give it a shot. But don’t be shocked when you end up scammed out of whatever money you have.
The Federal Trade Commission has charged California-based DebtPro 123 with deceiving customers in paying upwards of $10,000 for debt-relief services that promised to provide legal advice, settle debts, and repair credit, but mostly just left debtors in even worse financial shape than when they started.
According to the FTC’s complaint [PDF], the defendants would require that customers who signed on to the program give them access to directly debit their bank accounts. The company would then take out its fee of up to 20% of a customer’s total debt owed.
“Defendants collected their fees as a portion of the monthly payments, front-loading the fees,” reads the complaint. “For many consumers, more than half of their monthly payment went towards Defendants’ fees. For consumers who were in the program longer than eighteen months, Defendants also charged a $49 monthly
‘maintenance fee.’”
Feds Say Bogus Debt-Relief Operation Just Left Consumers Deeper In Debt – Consumerist
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