FTC Cracks Down on Dallas-Area Debt Relief Firms

By Grant Stinchfield
|  Thursday, Dec 2, 2010  |  Updated 7:04 PM CDT
View Comments (
)
|
Email
|
Print
Federal investigators are suing two <a title=Dallas-area debt-relief firms for deceptive promises." />

Grant Stinchfield, NBCDFW.com

Federal investigators are suing two Dallas-area debt-relief firms for deceptive promises.

advertisement

The Federal Trade Commission announced Thursday it is cracking down on two Dallas-area debt relief firms that they said target consumers in financial distress. 

Federal investigators are suing Financial Freedom Processing and Debt Consultants of America for, "luring consumers nationwide into paying thousands of dollars in up front fees, but failing to reduce credit card debts as promised," said the FTC Deputy Director of Consumer Protection, Charles Harwood.
 
Harwood says the FTC's investigation revealed the firms made deceptive promises to eliminate up to 60 percent of a consumers debt with no proof to back up their claims.

Charles White said he agreed to use Debt Consultants of America when his debt stemming from medical issues reached $14,000.  After eight months of making payments to the firm, White said he was informed none of his debt had been paid down and the money he paid was being used for administrative fees.

"I was at the point, if I didn't know God, I would have gone over and blown up their building. That's how frustrated I was. They didn't return a single call," White said.
 
The FTC said, as of Oct. 27, debt relief firms must disclose all fees associated with their debt relief plan and they are prohibited from collecting advanced fees.

The new advance-fee ban specifies that fees can not be collected until the debt relief service successfully settles at least one of the consumer's debts.
 
An attorney for both Financial Freedom Processing and Debt Consultants of America declined to comment on the case. 

For more information about Debit Relief Services you can visit the FTC's website at FTC.gov.  If you need legal help you can also contact Legal Aid of North Texas LANWT.org

Get the latest headlines sent to your inbox!
View Comments (
)
|
Email
|
Print
Leave Comments
What's New
Get NBCDFW on Mobile!
Get NBCDFW's free news and weather... Read more
Follow Us
Sign up to receive news and updates that matter to you.
Send Us Your Story Tips
Check Out