Imagine our surprise last week when one of our very own team members was the lucky recipient of a telemarketing call that was clearly from an unregulated debt consultant and was aimed at a consumer who was unaware of all of their legal options.
Luckily, our team member quickly clicked ‘record’ so that we could analyze exactly what claims were being made. Take a listen below:
What does a Debt Scam sound like?
Let’s take a closer look at some of the content of this short message:
What they said:
“… which may allow us to lower your monthly payment by half, and reduce your total debt by up to 50%”
Our take:
As a means of getting you to keep listening to this obvious telemarketing ploy, they make their boldest claim up front. Imagine – reducing your monthly payments by half and reducing your total debts by half as well? Let’s listen on to see how this works!
What they said:
“… credit card bills, personal loans and many other types of unsecured debt”
Our take:
Of course they’re not mentioning that income tax, student loans, wage garnishees, or anything other than credit cards and personal debts can be included. In fact, they’re not mentioning that many credit card companies have actually stopped dealing with these unregulated operators due to false claims and high fees.
What they said:
“… make one low monthly payment you can afford, become completely debt free in months. This opportunity will not last”
Our take:
Just so we’re clear, the creditors have agreed to accept debt reduction plans only for a ‘limited period of time’? Why would this be so? Why will this opportunity not last? This is completely false and a high pressure sales technique aimed at creating urgency in the consumers mind.
What are they actually selling?
These operators typically work completely by phone and you’ll never meet with them in person. You’ll conduct all of the business remotely, often with someone not even located in the same country as you! They will begin to charge you monthly fees and attempt to build up a ‘settlement balance’ of your savings over a period of months. During these months, of course your creditors will continue to pursue you aggressively – seeking wage garnishees, getting court judgments, seizing assets – all of which will negatively impact your credit rating and cause you stress.
When the debt consultant feels as though they have enough in the account to make an offer to your creditors, they will do so, after first deducting their fees of course. If the offer is not accepted, well, too bad. They’ll send you elsewhere, pocket your money and move on to the next unfortunate victim.
In our offices, we have seen increasing numbers of clients who have started dealing with these debt consultants and have come to us after spending thousands of dollars and enduring several months of aggressive collection tactics, only to find that nothing has been done for them. As for the fees they have paid, unfortunately there’s no regulatory body that you can complain to to recover.
In Canada, a Consumer Proposal can offer all of the benefits claimed above but with the added bonus that – it actually works. If you’ve started working with an operator such as the above, I invite you to share your story on this blog, or phone us at 310-0911 to meet with us for a free consultation to review your options.
I was recently a victim of one of these companies. Fortunately they only made off with $500 of my hard earned cash. I realized quickly that they manipulated everything they said to me to make me think that their program was the only solution for me. They actually went as far as to tell me to avoid my creditors and not to answer their calls. This was a big red flag to me. When asked how I was supposed to pay my creditors minimum payments and afford to pay them at the same time they said “most people enrolled in this program usually don’t continue to make the minimum payments to their creditors.” So sneaky, I had my bank account blocked, my rent check bounced, and I almost didn’t have a place to live as a result of their “advice.”. Not to mention I wasn’t “eligible” to get all of my money returned. So, my debt got larger and I lost money. So glad I realized this scam before it was too late!
@Sucked in: Wow, sorry to hear of your bad experience but glad you realized something wasn’t quite right sooner rather than later! It’s unfortunate that many people don’t and that a stressful situation is often made much worse.
Great follower of your blog, a lot of your writes have seriously helped me out. Looking towards posts!
Quality information, great blog template, maintain the good work
to me to make me think that their prrogam was the only solution for me. They actually went as far as to tell me to avoid my creditors and not to answer their calls. This was a big red flag to me. When asked how I was supposed to pay my creditors minimum payments and afford to pay them at the same time they said “most people enrolled in this prrogam usually don’t continue to make the minimum payments to their creditors.” So sneaky, I had my bank account blocked, my rent check bounced, and I almost didn’t have a place to live as a result of their “advice.”. Not to mention I wasn’t “eligible” to get all of my money returned. So, my debt got larger and I lost money. So glad I realized this scam before it was too late!
@Cliff @Hiram – Thank you for your kind words, we’re happy to have you following!
@Anamika – Thanks for sharing your experience. Hope you’ve gotten everything resolved now.