How to Find an FTC-Compliant Debt Settlement Company

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Frequently, debt settlement companies make fraudulent claims to potential clients. They might say: “You will only pay 25% of your debts,” or “This will not affect your credit score,” or “Calls and letters from creditors will automatically stop once you join our program.” These are all false statements, and they will not be made by a company that is compliant with the Federal Trade Commission, an independent agency of the United States government. This article discusses what an FTC-compliant debt settlement company should explain to potential clients.

Before we proceed, let’s look at the difference between debt settlement (also known as debt resolution or debt negotiation) and bill consolidation. A bill consolidation business negotiates interest rates and late fees with creditors. A debt settlement company negotiates lower balances. Suppose that you have $25,000 of unsecured debt with two credit card companies at a blended interest rate of 21%. A bill consolidation business negotiates lower interest rates on the two credit cards. A debt resolution company negotiates a lower balance.

Now, let’s go ahead and explain what an FTC-compliant business should clarify to prospective clients.

An FTC-compliant company should give potential clients an “honest assessment” of their current debt situation. They might say that filing for bankruptcy implies that one is not willing to take responsibility for his/her debts. They might also explain that the new bankruptcy laws make it more difficult for consumers to become debt free than before. They might remind prospective clients that bill resolution has worked remarkably for thousands of people over the years. However, personal commitment is needed to make debt negotiation work effectively.

New FTC regulations prohibit debt settlement companies from charging upfront fees before they begin working with consumers and businesses. A FTC-compliant company gives potential clients a free, no obligation debt analysis, which should include a free debt settlement savings estimate.

A debt settlement business that is compliant with the Federal Trade Commission cannot “guarantee” how much money clients will save using debt negotiation. Results vary from person to person. However, a responsible company will do everything to save their clients as much money as possible. A leading debt resolution business has this statement on their website: “We or your assigned local legal representation will do everything … to save you as much money as possible. Review past settlement letters to get an idea of how we have been able to negotiate settlements with creditors before.”

A trusted company will always have debt settlement letters and client testimonials on their website. How can anyone gain confidence in a business that does not provide any of this vital information?

An FTC-compliant company should make it clear that collection calls and letters might continue during debt resolution. A bill negotiation team normally sends out letters to creditors notifying them that a client has asked for debt help. However, this cannot stop “lawful collection activities.” In spite of this, many people report that phone calls and letters from creditors and collection agencies stop or decrease once they have sought debt relief.


Sweepstakes Scams Are a Form of Financial Elder Abuse

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Sweepstakes scams continue to rack up victims, despite warnings to the public. Often, senior citizens are the target of these types of scams. Thus, sweepstakes scams are a form of financial elder abuse. In a typical sweepstakes scam, a fraudster contacts an elderly victim and informs them that they have won lottery. The catch is that the elderly victim is then told that they must send in money in order to collect the sweepstakes prize. California financial elder abuse attorneys warn senior citizens not to fall victim to sweepstakes scams.

Recently, the Federal Trade Commission announced that it is putting an end to one large sweepstakes scam based in Ventura County. The defendant in the case owned three companies that allegedly mailed out more than 3.7 million letters to people in more than 156 countries. In this case, instead of asking for large sums of money from senior citizen victims, they asked for smaller sums of money. California financial elder abuse attorneys warn the public not to fall for sweepstakes scams no matter how much money the fraudsters ask for.

In this case, the senior citizen victims received personalized letters with official looking seals, stamps and bar codes. The seniors were told that they had won millions of dollars and could get the money by first sending in a small fee of $20-$30 within a limited period of time. According to the Federal Trade Commission, the scam has brought in more than $11 million dollars, mostly from senior citizens. California financial elder abuse attorneys say that senior citizens are often targeted for these kinds of mailings.

One of the letters that was mailed out as a part of this scam states that the victim has been chosen from a pool of 250,637 names. There is fine print on the back of the letter that states that consumers will actually only receive lists of sweepstakes they can enter instead of a cash prize. According to the Federal Trade Commission, the fine print does not clear the company of wrong doing because the claims are misleading and victims do not get what they are promised. Frequently, people do not see the fine print and send in the $20-$30 fee.

Sweepstakes scams such as this are widespread and one of the top five scams targeting consumers, according to the Federal Trade Commission. The fact that sweepstakes scams successfully target senior citizens makes them another form of financial elder abuse.

Evans Law Firm, Inc. handles elder abuse cases in California. If you think that you have witnessed or are the victim of elder abuse then, contact Evans Law Firm, Inc. at 41