FTC Charges Telemarketing Operation with Misleading Job Seekers and Making Millions of Illegal, Unsolicited Calls

Alleges defendants make unsolicited calls about educational programs to consumers who submitted their contact information to job and benefits websites

The Federal Trade Commission has charged a telemarketing operation and its owners with making millions of illegal, unsolicited calls about educational programs to consumers who submitted their contact information to websites promising help with job searches, public benefits, and other unrelated programs.

According to the FTC’s complaint seeking civil penalties, corporate defendants Day Pacer, LLC and Edutrek, L.L.C., and individual defendants Raymond Fitzgerald, Ian Fitzgerald, and David Cumming, obtain consumers’ phone numbers from websites that claim to help consumers apply for jobs, health insurance, unemployment benefits, Medicaid coverage, or other forms of assistance. Instead of offering these services, the defendants and their affiliates call consumers to market vocational or post-secondary education programs, according to the FTC.

“Telemarketers have a duty to ensure that they are not placing calls to people on the National Do-Not-Call Registry,” said Andrew Smith, Director of the Bureau of Consumer Protection, “And they cannot rely on affiliate websites that use fine print and other deceptive tactics to lure consumers.”

The job and benefits websites allegedly use different tactics, like small print, to hide their telemarketing purpose. For example, in the exhibit below, the web page states, “Jobs In Your Area” and “Thousands of Government Jobs In Your Area Are Looking to Hire Immediately,” and includes the misleading seals of several federal government agencies. At the bottom of the page is a block of small text that is illegible without substantial magnification. It states that clicking the “submit” button to request information about government jobs provides “consent” to receive telemarketing calls about various subjects unrelated to obtaining a government job.

FTC Exhibit: screenshot of website claiming to find government jobs for users

Similarly, the complaint alleges that the defendants have purchased leads from “FindFamilyResources.com,” a website offering to provide information about Temporary Assistance to Needy Families (TANF), welfare benefits, and unemployment insurance. The exhibit below shows a landing page that tells consumers they may “Learn More About Benefits Assistance” by submitting contact information in the boxes provided onscreen. The “yes” or “no” checkbox asking for consent to receive telemarketing calls is placed directly under an unrelated question about residency and age.

FTC Exhibit: screenshot of website claiming to help users find information about government assistance

The defendants are charged with violating the Telemarketing Sales Rule by initiating over five million unsolicited outbound telemarketing calls to numbers on the Do Not Call Registry since 2013, and by providing substantial assistance to other telemarketers who placed calls to numbers on the Do Not Call Registry.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois on March 29, 2019, after being referred back to the FTC by the U.S. Department of Justice.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Online Lending Company Agrees to Settle FTC Charges It Engaged in Deceptive and Unfair Loan Servicing Practices

Avant to pay $3.85 million for harming thousands of consumers

Avant, LLC, an online lending company, has agreed to settle the Federal Trade Commission’s charges that it engaged in deceptive and unfair loan servicing practices, such as imposing unauthorized charges on consumers’ accounts and unlawfully requiring consumers to consent to automatic payments from their bank accounts.

“We have alleged that Avant gave the run-around to consumers trying to repay their loans, because of systemic issues with the company’s loan servicing platform,” said Andrew Smith Director of the FTC’s Bureau of Consumer Protection. “Online lenders need to understand that loan servicing is just as important to consumers as loan marketing and origination, and we will not hesitate to hold lenders liable for unfair or deceptive servicing practices.”

According to the FTC’s complaint, Avant offers unsecured installment loans for consumers through its website. The FTC charged that in many cases, the company falsely advertised that it would accept payments by credit or debit cards, when in fact it rejected these forms of payments. The FTC also alleged that the company withdrew money from consumers’ accounts or charged their credit cards without authorization.  In some instances, Avant charged consumers duplicate payments without authorization, improperly taking consumers’ monthly payments twice or more in one month.  For example, one consumer’s monthly payment was debited from his account 11 times in a single day.

In many cases when consumers complained about the unauthorized charges, Avant  allegedly insisted that the consumers authorized the charges and refused to provide a refund. Despite hundreds of consumer complaints about unauthorized charges and internal documents repeatedly acknowledging this problem, the company continued to charge consumers without authorization, according to the FTC.

The Commission has also charged the online lending company with the following law violations:

  • failing to properly and timely credit payments made by check;
  • providing inaccurate payoff quotes to consumers;
  • collecting additional amounts even after consumers paid the quoted payoff amount; and
  • violating the Telemarketing Sales Rule and the Electronic Fund Transfer Act by requiring borrowers to agree to recurring automatic debits of their bank account as a condition of obtaining a loan.

The stipulated final order imposes a judgment of $3.85 million, which will be returned to consumers who were harmed by Avant’s unlawful practices.

Under the settlement order, Avant, LLC will be prohibited from taking unauthorized payments and from collecting payment by means of remotely created check (RCC). The company also is prohibited from misrepresenting: the methods of payment accepted for monthly payments, partial payments, payoffs, or any other purpose; the amount of payment that will be sufficient to pay off in its entirety the balance of an account; when payments will be applied or credited; or any material fact regarding payments, fees, or charges.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Ask a health professional before popping that pill

When I was young, I wanted the shoes that would make me run faster and jump higher. Now, I wish my brain would run a little faster when I can’t remember my account passwords. Unfortunately, some shady outfits have been trying to “help” people like me by making some mind-blowing claims to sell their dietary supplements.

The FTC just settled charges against four people and a dozen businesses that sold bottles of “cognitive enhancement” supplements through a collection of websites, including fake news websites. The FTC says the defendants falsely claimed Geniux, Xcel, EVO, and Ion-Z could increase users’ focus, concentration, IQ, and brainpower. The settlement bans them from making false or unsupported health claims and requires them to pay over $600,000.

According to the FTC, the defendants didn’t have proof that Geniux can increase concentration by 312 percent, boost brainpower by up to 89.2 percent, and enhance memory recall. They made these claims on websites designed to look like real news sites and featuring false claims that Bill Gates, Elon Musk and Stephen Hawking got dramatic results from Geniux. The FTC also says that customers — who paid up to $57 per bottle — couldn’t get a promised 100% money back guarantee.

If you’re considering a dietary supplement, remember: the government doesn’t review or evaluate supplements for safety or effectiveness before they’re put on the market. Your health care professional is the most important person to ask whether a supplement is safe for you. Even a natural supplement can be risky depending on your health and the medicine you take. If you see an ad with claims about miracle cures, ask a professional about the science behind the claims. If you think a product is being advertised falsely, please tell the FTC at FTC.gov/Complaint.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Financial tips for 2019 graduates

Congratulations students and parents! It won’t be long before young people across the country will put on their caps and gowns to celebrate their graduations. Many graduation speakers offer advice, some based on their own life experiences. The FTC has some practical advice to offer, too.

April is Financial Literacy Month and a great time to start planning for your financial future. The FTC has a library of free consumer materials, including a blog and media room, to help you make the most of your money and avoid costly scams.

Check out consumer.gov for basic, easy-to-read tips on budgeting, getting credit, renting a place to live, dealing with identity theft, and buying a car. And if you’re looking for a job, scammers may be looking for you. Some job placement firms misrepresent their services, promote nonexistent vacancies, or charge high fees in advance for services that don’t guarantee placement.

Speaking of scams, you might be surprised to learn that, according to recently released FTC data, younger people reported losing money to fraud more often than older people. It’s what the data has been telling us for a while, but it’s hard for people to grasp. Last year, based on those who reported fraud and gave us their age, 43% of people in their 20s reported a loss to that fraud, while only 15% of people in their 70s did. Check out 10 Things You Can Do to Avoid Fraud to help stay a step ahead of the scammers.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Charity Scams Are Everywhere: How Can You Donate Safely?

When we see someone in need, it pulls at our heartstrings and we want to do anything we can to help them. That’s why charity scams are so devastatingly effective. You want to do something good for the world, but some greedy person is taking advantage of both you and the cause.

These scams are sinister traps, but don’t worry, we’ll show you how you to avoid them and make sure your money only goes towards worthy causes.

What Are Charity Scams?

Charity scams involve the fraudulent use of charities to take either money or information from victims. Con artists often use emotional appeals because they break down our guards and can get us to hand over money when we otherwise wouldn’t have.

These scams can happen in person, over the phone, through email, text message or social media. They go beyond trying to get money out of people – some fraudsters use charities as a pretext so that they can get the details they need to commit identity theft.

There are a range of different types of charity fraud, including inflated or continuous payments, crowd-funding lies, phishing, tax shelter scams and guilt tripping. If you want to learn about these scams in more detail, have a look at this rundown.

Check out the following tips if you want to avoid charity fraud and make sure your money goes to those in need.

Donate Actively, Not Passively or Reactively

One of the most common ways for people to donate is when they are prompted in person, over the phone, via email or through other channels. This is a reactive form of donation, and it can lead to problems.

If you are walking down the street and a charity worker waves a tin at you, asking for money, you might hand some over without thinking about it. Likewise, when you get called by a charity, you may be pressured into giving money before you can give it some proper thought.

This is dangerous, because in both of these situations, you don’t have time to evaluate whether or not the charity is legitimate. It could actually be a fraudster using manipulative tactics to solicit donations you otherwise wouldn’t give.

If you really want to make a positive change in the world and avoid falling for scams, the only way you can be certain is to take your time and do some research. Acting impulsively can easily lead to getting scammed and legitimate charities missing out on the money.

On top of this, you will also find that some of the most well-known charities are far less effective than they make themselves out to be. To avoid scams and make sure your donation has the most beneficial impact, have a look at one of these charity review sites and find an organization that you like:

Once you find one that you approve of, you can start sending it money. In the future, whenever anyone solicits donations from you, politely say, “No thank you, I already have charities that I support.” If you want, you can set aside whatever money you may have given to the tin-rattler, and give it to a charity you know is trustworthy.

Extra Tips for Donating Safely

The above advice should point you in the right direction, but there are some other tips that can also prevent you from falling for scams:

  • Pay with secure methods – use PayPal, a secure credit card platform, or checks. Never give out your bank details or send cash. You should also ask for a receipt for your records and tax purposes.
  • Avoid suspicious links in emails – make sure that any links you click on are the legitimate charity URLs and that their names are spelled correctly.

Reporting Scams

If you notice a scam, report it to protect others and to help punish the perpetrators. If we shut down these fraudulent organizations, we can make sure that more money is heading to those who really need it. Report scams to the following agencies:

If you are a victim of charity fraud, report it to your local police as well.

This article by Josh Lake first appeared on Comparitech.com and was distributed by the Personal Finance Syndication Network.

Online lending company broke the law. FTC counts the ways.

If you need to borrow money to consolidate credit card debt, make home or auto repairs, or pay other unexpected bills, a personal installment loan may be an option.

Most personal loans are unsecured, meaning they don’t require collateral like a house or car, and typically have higher interest rates than secured loans.

Paying a higher interest rate is one thing, but when it came to one online lending company, customers were caught off guard by what the FTC says were lies and illegal conduct.

Today, the FTC announced a settlement with Avant, LLC, a company offering personal loans online. According to the FTC, Avant deceived customers in a bunch of ways about what and how they were supposed to pay. For example, the FTC alleges that Avant:

  • advertised that it would take payments by credit or debit cards when, in many cases, it wouldn’t;
  • illegally required customers to agree to automatic payments from their bank accounts;
  • deceived customers about the amount needed to pay off their loans;
  • collected — or tried to collect — more money from people who paid the quoted payoff amount; and
  • made unauthorized charges on customers’ bank accounts.

The settlement bars Avant from engaging in similar conduct and requires it to pay $3.85 million to thousands of customers harmed by its loan servicing practices.

If you’re shopping for an online loan, do some research, especially if you’re not familiar with the company. Type the lender’s name into your favorite search engine with terms like “review,” “complaint” or “scam.” If you find bad reviews, you’ll have to decide if the offer is worth the risk. After all, it’s only a good deal if the loan and servicing experience lives up to the written promises.

If you think a company has violated the law, tell the FTC at ftc.gov/complaint.

For more information, check out our Credit and Loans page.

This article by the FTC was distributed by the Personal Finance Syndication Network.

3 Unique Ways to Think About Getting Out of Debt

Introduction:

As a personal finance counselor, I hear many stories from individuals struggling with debt.  Some fell on hard times due to financial misfortune, and others suffered from poor spending habits.  But every now and then you come across someone who started with only a little debt, then tried to get themselves out, but because they didn’t know the system and what questions to ask, they somehow became mired in debt. So for those friends of mine out there, this article is for you.

To begin, let’s start off by reimagining debt as someone sitting in a leaky boat in the middle of shark-infested waters, wondering how they got themselves into this situation.  What would you advise this person on how to not become fish food? I’m going to venture that more or less, in order of urgency, you would say: Plug the leak, See what tools you have available, Start bailing out water from your boat.

In many situations debt is no different than an ocean full of sharks, and those same rules apply rather well to the debt situation.  So let’s see how our own advice can be used to get us out of debt.

1) Plug the Leaks

If you’re spending more than you earn every month, then your boat has a leak.  This is the first and most pressing issue we must address. The math is rather simple: you can either increase your earnings, or you need to decrease your spending.  And because you’re reading this article, a big portion of that spend also probably comes from payments on your debt.

Increase Earnings

Consider getting a second job or becoming a Uber or Lyft driver on the side.  Uber says it’s drivers makes $25 an hour, but after you account for commision, gas, depreciation and taxes, you’re taking home about $11.77 an hour.  Working at 4 hours a day for 6 days a week, that’s still an additional $1,224 a month a month though. This isn’t bad for a side job, but you may want to look at whether this works for your area as some areas may be better for side hustles than other areas.

In The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing, Marie Kondo’s challenges us to ask the question of whether an item that you own or treasure sparks joy. If not, then sell it.  Many second hand stores will buy decent clothing and sports equipment. If you have an old phone or computer lying around, try selling those too.

For more ideas, consider exploring Hack The Entrepreneur’s 176 Side Hustle Ideas.

Decrease Spending

You can find a million ways and blog posts on how to save money.  I’ll just focus on a few big ticket items here to get your creative juices flowing:

Do you need the vehicle you have, especially if it’s purchased on a loan?  If you sold it and downsized to something smaller, could you reduce your monthly payments? Having a car loan doesn’t just increase your expenses, it also makes getting additional loans more challenging, because it inflates a ratio that many lenders use to assess you called Debt-To-Income ratio (DTI).

Can you reduce your cable and internet expenses?  I had a good friend who was evicted for being unable to pay rent, yet she continued to pay $150 a month for her cable and internet.  I wish she had just listened to my advice and applied for Xfinity’s Low Income Housing program where internet can be as low as $10 a month (also available to students, but you need to ask around).  If you buy your own modem, you save $13 a month by not renting theirs. And for TV, you can just buy an HD Satellite. In all, that would have saved her $140 a month. That’s a large fixed expense that she now doesn’t need.

Shut off all monthly subscriptions.  I had a friend that paid $70 a month for credit monitoring services that offered more or less what CreditKarma offers for free.  That was an easy cancel. I also joke that I pay for fitness club memberships so I can tell people I go to the gym. If you’re anything like me, then just pay for a daily pass if you do go, or better yet, just do pushups in your living room or go for a run outside if you’re able to.  If you have to be part of a gym, then consider community centers and the local YMCA. They often offer very competitive rates for membership or single-use cards.

Regarding food, look for deals and avoid eating out and going to bars.  I used to spend $8 a meal at Chipotle and $2 for a cup of coffee. That ended up being $540 a month for just the basics.  Add in the fancier restaurants and going out for drinks on Friday nights, and my food bills was around $1,000 a month. After I decided to prepare my own food, I started each week by buying only items that were on sale or that I had coupons for.  I also start shopping more at the grocery stores that consistently had lower prices (Ethnic supermarkets and farmers’ markets often sell groceries at 50% of what large corporate chains do) and quickly found I was only spending $4 a meal and saving about $700 a month or $8,400 a year.  It’s not as fun or convenient, but it helped me quickly stop some of my leaks.

Decrease Your Debt Interest Rate

If you have a credit score above 600, you might qualify for a lower interest credit card consolidation loan so you can pay off your more expensive credit card bills.  If you have excellent credit, you can also qualify for certain credit cards that offer 0% APR for balance transfers for the first year. This will buy you 12 months of funding interest free to pay off your debts.

Buyer Beware:  If you know you don’t have the fiscal discipline, then stay away from this strategy.  Better yet, cut up those credit cards. I’ve come across too many customers that tried to consolidate their debt by taking out a personal loan, but the moment they received the cash, they spent it all and instead got only further in debt.  Needless to say, the same goes with the credit card. If you can’t pay off your bills in 12 months, then don’t do it.

Double Beware:  Certain lenders will only give you a personal loan if you offer collateral, such as a car or the title to a home.  I would strongly recommend against this. I believe Shel Silverstein sums up that strategy best with this poem:

My dad gave me one dollar Cause I’m his smartest son,
And I swapped it for two shiny quarters
Cause two is more than one!

In summary:  don’t trade unsecured debt for debt that requires collateral. It’s a bad deal.

2) See What Tools You Have Available

In addition to Credit Card Consolidation, which I mentioned above, there are many programs out there that offer assistance with debt.  I’ll cover the most popular ones here:

Paying off Your Debt

Do this the old fashioned way, by applying all your newfound savings from above, and paying off your creditors:

Pros:  It feels good to do it yourself.  Best effect on your credit score too.

Cons:  It can take a while and requires a lot of discipline.  Also, it might not be enough if you’re completely swamped in debt

Recommendation:  If you can afford this, this is the most honorable approach.  If you do want to pay off your debt on your own, check out different key methods to pay off your debt such as the snowball or avalanche method.

Do nothing:

For all your credit card debt and most other unsecured loans (excluding student loans, childcare, and liens) if you do nothing for 7 years, technically your slate is wiped clean and the creditors can no longer legally pursue you or ding your credit score any more.

Pros:  You don’t have to pay anything

Cons:  Your credit score can be destroyed for 7 years, and you will suffer the agony of being hounded by collections agencies for years on end.  These will still continue even after the 7 years. Even though the collectors have no more legal rights to pursue the money from you, they will still harass you in hope that you’ll pay up out of ignorance.

Recommendation:  I would not recommend this, especially if your debt is large.  Chances are good you’ll get sued at some point by the creditors, which means going to court and wage garnishments.

Debt Management Plan:

These are offered by nonprofit organizations that help consolidate and then renegotiate your  interest rates with your creditors. This option can be an alternative to debt settlement.  They usually charge a monthly fee, legally it can’t be over $79 a month, but most run around $25 a month.

Pros:  They have minimal impact on your credit score

Cons:  Their program lengths can run for 5 years, which means you’d be paying around $1500 in fees before you’re done

Recommendation:  You can use these if you don’t have a lot of debt and you can be quickly in and out of the program.

Debt Settlement Plan:

These programs, also known as Debt Relief, withdraw a predetermined amount from your bank account each month that they put into escrow for you.  This option is often an alternative to bankruptcy.  They then negotiate with your creditors to reduce your overall debt amount, and use the money they have been saving up for you to pay off that debt.  

Pros:  You can get out of debt within 2 years and pay as little as 27% of your original debt, although it averages out to be around a 55% discount

Cons:  In order to get your creditors to be willing to negotiate, you’ll have to let your bill payments fall behind.  If they aren’t already behind, this could have a big impact on your credit score. Also, many debt settlement programs charge exorbitant fees up to 25% of your original debt amount.  This often leaves debtors paying more than if they had just stuck with their original payment schedule.

Recommendation:  There are many Debt Settlement Company where the representatives are not honest with their counsel or their high settlement rates. If you use debt settlement, make sure you find a good company, go through an exhaustive list of pros and cons and always ask about their rates and payment plans. For example, one of the biggest pain points is the credit score impact, which we go into great lengths to explain and simulate in this blog explaining debt settlement credit score impact.

Payday Loans & Title Loans:

Going back to our metaphor, these tools are drills that will help you poke more holes in your boat, if your goal is to sink as quickly as you can.  

Pros:  You get instant cash

Cons:  The interest rate can be so high that it will keep you in the debt cycle.

Recommendation:  I can go into horror stories here, but just please take my advice and avoid these. Reach out to us if you have any other questions as we’d like to help you stay away from these options.

3) Start Bailing Water

Once you decide on a strategy, the most challenging part is having the discipline to actually start bailing yourself out of debt.  The key to this is budgeting and cash flow management. Ascend is building a cash flow management app, called Flow, to help folks in our debt settlement program manage his/her spend effectively.

For those that haven’t budgeted before, I recommend to start simple. Start so simple that you are literally only tracking and documenting how much you make and how much you spend in one month. Too often, we try to jump into hyper-complex budgeting apps/methods that burn us out in 5 weeks.

For those that want a more informative budget, such as how much you really did spend at Starbucks this last year, Ascend is developing a cash flow management app that allows you to input all your credit and debit cards.  It then monitors all your non-cash spending and categorizes each expense before summing up your category spend by month. This will be a great way to see which areas you need to focus more attention, when it comes to saving. Before then, Steve Rhode from GetOutOfDebt.org has a fantastic blog post, titled Budgeting 101 that outlines budgeting basics and existing applications that one can use.

Also, if you struggled with credit card debt in the past due to uncontrolled spending, then cut up your credit cards and only use debit cards.  Watch Marie Kondo’s special on Netflix (but don’t get the subscription if you don’t already have one) and find ways to really cut down on your spending.

The work isn’t easy.  Sometimes it might not feel like you’re making an impact.  But like the metaphor goes, bucket after bucket, if you put in the time, discipline, and effort, you will rescue yourself from debt.  I’m rooting you on, and if you want to share your success stories, I’d love to hear about them in the comment sections below. Every success is worthy of a boast and celebration.

This article by Ben Tejes first appeared on Ascend Blog and was distributed by the Personal Finance Syndication Network.

Ads for diamond jewelry should be crystal clear

If friends know you’re shopping for diamond jewelry, they may say, “Remember the 4Cs: color, cut, clarity and carat.” Here are three more important letters for jewelry shoppers: F-T-C. The FTC enforces laws against false advertising and created the Jewelry Guides, which show jewelry businesses how to avoid making deceptive claims. FTC staff recently looked through diamond jewelry ads on Facebook, Instagram, Twitter, YouTube, and other sites to find out what shoppers are seeing. They found eight businesses using ads that might be deceptive, or not in line with the Jewelry Guides, and sent warning letters that urge the businesses to review their advertising, make any necessary revisions, and tell the FTC what they’ve done to address the concerns.

The Jewelry Guides say a seller should use words that correctly describe a precious stone, so shoppers know what they are buying. Some of the ads reviewed by FTC staff may have suggested that jewelry made one way was actually made another way, including suggestions that a diamond was taken from a mine when it was really made in a lab. And some businesses only put information about how a stone was really made on a “diamond education” webpage, rather than in or near an ad where shoppers were more likely to see it.

Before you buy, compare quality, price, and service from several businesses. To check on a business, enter its name and the words “complaint” or “review” in a search engine. Get to know common phrases like natural, lab-created, or imitation. Those stones have different values and different qualities, and need different care. If you have a problem with jewelry you purchased, try to resolve it with the jeweler first. If you think you were misled by an ad for jewelry, please report that to the FTC at FTC.gov/Complaint.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Need help with your credit card debt? Start with your credit card company!

If you’re struggling to keep up with credit card bills, you’re not alone. According to a 2017 Bureau report, from 2015 to 2017 overall credit card debt increased by 13 percent, while people with very low credit scores saw their debt rise by 22 percent

Even if you’ve hit a rough spot, lost your job, are dealing with family illness, or facing emergencies, you still have options. The earlier you act on those options, the better your chances are for avoiding a debt in collections, damage to your credit report, a potential lawsuit or bankruptcy.   

Address your credit card debt with your credit card company

Contact your credit card company. When you think you might miss a credit card payment, or you already have, contact your credit card company as soon as possible. Many will work with you to find a repayment plan that suits your current situation. Once you’re late or miss a payment, you’re considered delinquent. If you don’t pay, the credit card company may block your ability to use your credit card and report the delinquency to the credit reporting companies. Generally, that delinquency can stay on your credit report for up to seven years. You could also face debt collection and be sued.

Find out what repayment options your credit card company offers. Credit card companies can, and often do, provide alternative repayment options. They depend on, among other factors, your income, how much you can afford to pay, and the amount you owe. They offer loss mitigation programs, sometimes called forbearance or hardship programs. Often these programs let you postpone a set number of monthly payments or pay a lower monthly payment at a reduced interest rate, until you repay the balance in full. If the credit card company determines that you cannot afford a full repayment plan within a certain timeframe, you might be able to negotiate to settle the debt for an amount lower than what you owe. This would depend upon the company’s policies and your account-specific circumstances. Remember to get written confirmation of any alternative repayment option to which you agree.  

Debt settlement companies are typically for-profit companies that often state that they can
negotiate with your credit card company to reduce the amount you ow
e. Credit card companies generally do not have
special offers available to only debt settlement firms, so you are paying the
debt settlement company for work that you can do yourself. Typically, the debt
settlement company will ask you to stop any payment and will ask you to stop communicating
directly with your credit card company. Stopping payments might have a negative
impact on your creditworthiness that you could avoid by working directly with
the credit card company. Stopping payments could also result in a lawsuit being
filed against you by the credit card company or a debt collector.  

Debt settlement companies charge fees–often 20 to 25 percent (or more) of the settled debt. You may face additional fees as well. You should carefully review all the terms and conditions of the debt settlement company’s fees and know your rights . For example, it’s illegal for companies that sell debt settlement and other debt relief services on the phone to charge a fee before settling your debt. 

Also, while credit card companies’ own loss mitigation policies are available to all eligible consumers, according to the 2017 Bureau report, often credit card companies will not work with debt settlement companies.

Comparing Costs: Debt settlement company vs. Credit card company

To better understand the difference between working directly with your credit card company and working with a debt settlement company, let’s take an example of a $10,000 credit card balance that is more than 120 days past due. This example assumes the credit card company would agree to a 60 percent settlement on a $10,000 debt, meaning you pay $6,000 plus any fees if you work with a debt settlement company.

This article was distributed by the Personal Finance Syndication Network.

FTC to Send Refund Checks to Consumers who Lost Money in Business Opportunity Telemarketing Scam

The Federal Trade Commission is sending refund checks totaling more than $7 million to people deceived by the operators of an alleged business opportunity fraud that targeted seniors and others living on a fixed income. The refunds stem from a settlement the FTC reached in 2017 with Advertising Strategies, LLC, under which the defendants surrendered virtually all their assets to provide consumer refunds.

According to the FTC’s complaint, the defendants – who operated under names such as Building Money, Prime Cash, Wyze Money, and Titan Income – telemarketed bogus online investment opportunities to people across the nation. The descriptions of the “opportunity” varied, but typically involved buying or investing in e-commerce websites, or participating in a profit-sharing program involving credit card companies and e-commerce websites. The defendants took hefty payments from consumers. At the FTC’s request, a federal court halted the scheme and froze the defendants’ assets pending litigation.

The FTC is mailing 10,365 checks averaging $684 and totaling $7,097,257 to consumers. Recipients should deposit or cash checks within 60 days, as indicated on the check.

The FTC never requires people to pay money or provide account information to cash a refund check. If recipients have questions about the refunds, they should contact the FTC’s refund administrator, Rust Consulting, Inc., at 1-888-227-9829.

FTC law enforcement actions led to more than $2.3 billion in refunds for consumers in a one-year period between July 2017 and June 2018. To learn more about the FTC’s refund program, visit www.ftc.gov/refunds.

This article by the FTC was distributed by the Personal Finance Syndication Network.