Cuomo Starts National Debt-Settlement Industry Probe

[Joanne98]

Source: Bloomberg


May 7 (Bloomberg) -- New York Attorney General Andrew M. Cuomo has begun a national investigation into the debt- settlement industry, which he said preys upon consumers facing high credit-card debt.

Cuomo has subpoenaed 14 companies and one law firm to learn about their fee structures and how many people have benefited from their services, according to a statement by his office. Some companies have falsely advertised that they can reduce credit-card debt by as much as 75 percent through negotiations with creditors, according to the statement.

The debt-settlement plans usually assume that consumers will save money over one to three years, and those savings will be used to pay the company’s fees and any negotiated settlement, according to the statement. Most consumers can’t meet the savings requirements because of precarious finances, it said.

“Millions of hardworking Americans are finding themselves imprisoned by debt,” Cuomo said in the statement. “In response, a rogue industry has stepped in, offering consumers false hope, charging tremendous fees, and leaving them in a worse financial condition.”



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a85ZL6AKxm60&refer=home

[Democrats_win]

1. Shoot! On top of the original usury fraud there's this! Good Grief!

There's that law that says if someone dies (of a heart attack for example) while the criminal is robbing a bank with a gun, the criminal can be tried for murder.

Given that usury is morally illegal, shouldn't the bankers have some sort of penalty for causing people to suffer further fraud from this Debt-settlement industry?

The banksters only accomplishment: crime upon crime. The world waits for the Democrats to do something before the guillotines are errected.

[Metta]

2. Mazel freaking tov. It's about time someone did something for everyday people.

'bout time.

[jwirr]

3. I watch those advertisements on TV and wonder just what they have

to gain and what they can do that I cannot do myself.

[ima_sinnic]

4. ironically, a box full of Google ads for "debt settlement services"

fills the right-hand side of the OP.

The only legitimate one, AFAIK, is Natl Consumer Credit Counseling Services, basically a nonprofit. I have worked with them twice. They set up a budget with the debtor, who makes one payment to them each nmonth that is distributed to creditors, sometimes in quite small increments. They do take a very small fee, but in my case it was worth it. They got the interest rate on a finance co. loan lowered from 21% to 9%. There is nothing sleazy about them. In addition, the fact that I worked through them never showed up on my credit report.

[DebbieCDC]

5. I am using what's called a debt management plan run by a non-profit agency

Also known as consumer credit counseling. I had to pay a $25 set up fee and they charge me $15/mo. In return, they negotiated down all my interest rates and got late fees and overlimit fees abolished. In some cases my interest rate went from over 20% to under 10%.

They withdraw one lump sum once a month from my checking account and pay all my creditors. It's been working out really well so far.

The important thing to remember is that this is NOT -- I repeat NOT -- debt settlement where they promise to get 50% of your bill forgiven, etc. Those are nothing but more ripoffs that prey on people overburdened with credit card debt. What I'm talking about is debt management. Yes, I will have to pay all the Visa, MC, gas station, department store, etc. bills in full -- but I get the advantage of MUCH lower interest rate which equals a quicker payoff.

This is going to take a few years, but then I will be credit-card debt free (amen!) and will NEVER get myself in that black hole again.

If anyone's interested, check out debt management plans that are approved by the AICCCA or NFCC.

On edit: spelling

[PSPS]

6. And these crooks are one of the largest advertisers on radio, including Air America.

Let's see, we've got "debt settlement," prostate "cures," "tax farming" ("we'll settle your debt with the IRS") and the always reliable "I buy gold. You should too!!11!1!" Each is a scam, yet they buy a lot of radio advertising, including on-air personality plugs for which they pay a premium.

The only thing we make and sell in the USA anymore is deception.

[DebbieCDC]

7. Yes, it makes me really upset that Air America pushes these debt settlement scams

:grr:

[Robbien]

8. Why is Cuomo the only one out there going after all the crooks

What, is the only one Attorney General in the whole of these united states? There is plenty of financial fraud out there. More than enough to keep all the AGs busy for decades.