Credit Repair: Self Help May Be Best

The Federal Trade Commission (FTC) is inundated with complaints from consumers who have been scammed by credit repair agencies. As a result, they state, "Credit Repair: Self Help May Be Best."

The term “credit counseling” used to mean debt management help. These days, however, the term more likely refers to companies that are in the business of debt consolidation or debt settlement. I’ve yet to hear from someone who has benefited from such “services,” and often I hear from those who have been hurt.

I received the following email just as I was finishing up the 2nd Edition of BestCredit:

From: blank @ noneya.com
To: support @ bestcredit.com
Subject: HELP!
Date: 06/18/05

My husband and I agreed to “hire” Trinity Debt Management to help us consolidate our debt. We paid them $679/month for two years.

When I had to stop working (I was diagnosed with chronic fatigue syndrome) in February of this year, I had some time to research what was happening. I found that there was a $7,000.00 difference in what Trinity took out of our checking account and what our creditors show was paid.

My husband wants to hire an attorney to go after them since they can’t give us a detailed answer to our questions.

Since I am not working, we are struggling BIG TIME. We don’t want to file for Bankruptcy, but are desperate for help (we have hired “Credit Attorneys” to clean our credit up, but we still need to know how we can get a consolidation loan with payments that won’t kill us. We currently own our home, but only have ~8K in equity built up. My husband is an ordained music/worship pastor and started selling health, life and p & c insurance when I started to have health problems. We have five children, but only one 20 year-old still at home.

Can you direct us? I want to buy your book, but we just don’t have the money right now. Any advice you could give us would be GREATLY appreciated.

Thank you!
Regards,

[Name Deleted]

And my reply:

From: support @ bestcredit.com
To: blank @ noneya.com
Subject: RE: HELP!
Date: 06/19/05

Hi [Name Withheld],

Your problem is not uncommon. First, file a complaint with the FTC and your state attorney general. The FTC’s Web site is here:
http://www.ftc.gov/ftc/consumer.htm

You can also contact the attorneys general in the state which Trinity does business. Make sure all of your complaints are in writing (use their Web form if available).

And finally, you’ll need to hire an attorney. Your best bet is to search for one on the National Association of Consumer Advocates Web site: http://www.naca.net.

Wish I could do more, but once someone takes on a debt settlement company, there isn’t much I can do for them. Particularly when the whole situation is made worse by misdealings. Filing suit will likely be your only recourse, but it’s important that you file the complaints, as the FTC and attorney general can ultimately shut Trinity down if they get enough of them.

Good luck,
Dana Neal

Once someone gets into such a situation, he or she truly is beyond my help. It happens all too often. Hundreds companies are out there making a great deal of money on the hardship of others. The FTC is shutting down many of these organizations, even nonprofit companies. The FTC raided the National Consumer Counsel and closed its doors in May 2004, and AmeriDebt is currently under investigation for defrauding consumers. AmeriDebt’s Web site is offline, and it looks as if the company is all but finished. Shady operations like these abound, and they cause legitimate companies to struggle with draconian laws meant to shut the bad ones down.