Debt relief firms sued by the FTC - Other News


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Debt relief firms sued by the FTC

Debt relief firms sued by the FTC

Debt relief firms sued by the FTC

Debt relief firms are products of the economic recession. These firms had the purpose of helping financially troubled individuals with their debt issues given the vulnerable economic conditions at the time.

FTC says that these firms have charged card holders with a fee which are large enough, but are not identical to the efforts done by these firms to reduce their clients’ debt. FTC responded to thousands of complaints about debt relief firms which law officials have targeted for deceptive advertising and fraudulent practices.

The Federal Trade Commission (FTC) has sued debt relief firms’ Financial Freedom of America, Inc. under Financial Freedom Processing, Inc., Debt Consultants of America, Inc., and Debt Professionals of America, Inc. for having been involved in misleading and fraudulent practices of claiming debt reduction strategies with results that are far from encouraging and may even be quite the opposite of what these firms sought to guarantee in the first place.

In order to attract more clients, the FTC said that the firms named above have promised 30 to 60 percent debt reduction for their customers. The debt reduction time line which these firms have presented to their clients ranged from 18 to 36 months, as shown in the respective websites of these debt relief firms according to the FTC.

The advertising of the debt relief firms was also well-expanded not only to include websites but also other forms of media like television and radio. Print ads along with other advertising venues included toll free contact numbers for interested customers. The numbers serve the purpose of providing free consultation to the prospective clients.

After having been successfully included in the debt relief firms programs, the customers are then made to pay charges amounting to thousands of dollars every month, FTC said. Maintenance and negotiation fees were also among the payment requirements for the firms’ continued and supposed debt relief efforts.

FTC said that the debt relief firms’ clients, after many months of not seeing any improvement in their credit and significant reduction in their debt, have backed out of the services and left the programs in the firms, they were part of.

FTC says that the same debt relief firms have slapped their customers who have deferred from using their services with huge cancellation fees on top of their debt amounts. The FTC concludes that instead of the clients solving their debt issues their problems have been rather compounded in their decision to seek “relief” from these firms.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

You May Soon Be Able to Freeze Your Credit for Free

Posted: March 21, 2018

When a data breach hits the news, it can make you worry about the state of your credit data. You may even consider freezing your credit so that hackers can't open any new cards or mortgages in your name. But the downside is that it can ... Continue reading
PayPal as a New Rewards Category for Chase Freedom

Posted: March 20, 2018

PayPal is the newest bonus category for Chase Freedom, earning cardholders 5 percent cash back starting in April and going through June 2018. During that time, they will also earn 5 percent back when using Chase Pay and when shopping for ... Continue reading
Early Tickets for Jay-Z and Beyoncé Tour For Citi Cardholders

Posted: March 19, 2018

If you are a fan of Jay-Z and Beyoncé and you are a Citi cardholder, you might want to head over to the Citi Private Pass website to score early tickets for their OTR II stadium tour, starting in the U.K. and ending in North America. Citi ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants,, or wholesale clubs up to the quarterly maximum each time you activate.
For Excellent, Good Credit
Our application is quick and easy with instant pre-qualification available
For Fair / Good Credit