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Horror Stories From The World Of Credit Counseling And... How To Fire These Clowns And Avoid Further $$$ Heartache! Plus: Missouri's AG Goes After AmeriDebt For Their Practices
October 23, 2003
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Dear Ben: Last year I made the mistake of my life by joining a credit counseling program I found on the Internet, a company based in Florida. They claimed they would reduce interest rates for me and combine my payments into a single $625 (monthly) payment. First bad thing they wanted? My first payment goes to them-so I paid it. Now my perfect (but huge) credit rating was ruined immediately because they kept the first payment. Then I sent my second payment and by now my creditors were calling, but the credit counselor assured me the payment was "on the way." I sent them a third payment but nothing was ever received by my creditors and then...the credit counseling company suddenly disconnected their phones and closed down their website! Almost $2,000 that I gave them to pay my creditors was stolen. No one in the Florida Attorney Generals office has been able to help me. Only one or two of the creditors have gone to a third party for collections. Should I join a CCCS? I'm very confused and not sure what to do.
Joe, via e-mail
Dear Ben: I was an idiot and signed up with a "credit counselor." How do I break my contract? They took a $256 initial payment that will be applied to my "last month's payoff." Is this just a $256 mistake? Please don' call me a moron because I am already feeling like one.
Kristy, via e-mail
Dear Ben: Thanks for your book Back Off! It's informative and exposes the credit card firms and collection agencies for what they are-scumbags. These unscrupulous and despicable companies need to be put where they belong...out of business. I'm 74 years old and maintained good credit for most of my life. Then my job of 40 years went belly-up (with no warning), my 35 year marriage soon followed...and then I lost my home. Now in my late 50s, I was able to get a mediocre job and keep my head above water-until the medical problems began. In less then two years I had five major surgeries-plus a stroke-and then I lost the use of my voice.
I went to the local CCCS (Consumer Credit Counseling Service) office for assistance; they eagerly welcomed me until they found out I'd exhausted all of my assets, was unable to work and my only income was a Social Security check. They quickly sent me on my way realizing there was nothing in it for them. The collection weasels were attacking like out-of-control pit bulls, but you re-energized and inspired me to vigorously combat these pinheads using the legal ammunition outlined in your book.
Ray, via e-mail
Dear Joe, Kristy and Ray: Your assorted credit counseling stories hammer-home what I've been warning America about for the past eleven years! Caveat emptor-let the buyer beware-especially when you're trying to cure (many times desperate) debt-related problems. The explosion in the credit counseling and debt re-negotiation industries was a predictable outgrowth of the greedy lending strategies pursued by many of our nation's credit card companies over the last decade. The joint announcement by the IRS and Federal Trade Commission last week that they were investigating the business practices of "nonprofit" credit counseling services simply validates my warnings. I've chastised the "mainstream media" for years about their blind and obviously naive recommendations that debt-laden consumers seek the assistance of "nonprofit credit counselors"-for the same reasons the Feds are now investigating them. I wrote a chapter about the industry in Back Off! The Definitive Guide To Stopping Collection Agency Harassment, my newest book released last June. The entire chapter: "You Don't Think They'd Lie, Do You? The Truth About Credit Counseling & Debt Re-Negotiation Services" is posted (for free, of course) on my website: www.bendover.com/cccs.asp.
By the way, Kristy: Fire the credit counselor and consider the $256 an inexpensive lesson.
Dose of Dover For The Week: Additional revelations about the related world of debt re-negotiation is also posted on my site (at the link referenced above) including information from a lawsuit filed by the Missouri Attorney General's office against national credit counseling service AmeriDebt last month. Finally-America's about to have its eyes opened about the widespread abuses of the term nonprofit. Stay tuned...
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