Watch ‘debt settlement’ industry carefully

It is difficult to understand how a company can lower someone’s tax debt. How can hiring a third party company to eliminate owed taxes be legal?

The government can put you in jail and it will if you are caught cheating on your taxes.

The Better Business Bureau gives a grade of “F” to two companies in Central Texas based on complaints and the actions taken by the companies to address allegations that promises were not met.

When you notice that money is deducted from your bank account monthly and the debtors are calling you for their money, something is seriously wrong.

During these stressful times of an economic crisis people are eager to find relief from somewhere, anywhere. People are frantic and will go to extremes to find solutions to these problems. The companies use words like “practical” and “affordable” to lure new customers.

On Feb. 10, Illinois Attorney General Lisa Madigan filed lawsuits against Clear Your Debt and Swift Rock Financial Services. The suit alleges both companies are engaging in deceptive marketing practices, charging excessive fees and doing little or nothing to improve consumers’ financial standing. These companies are based in Austin.

“The for-profit debt settlement industry, they say, entices consumers saddled with heavy credit card debt by offering to settle with creditors for amounts far less than those owed. What consumers often get, however, are heavy up-front fees, greater damage to their credit rating and, ultimately, even more debt,” Madigan said.

“Whether it is intentional or not, these companies easily can be confused w ith legitimate, not-for-profit consumer credit counseling operations that really do help their clients get out of debt,” she said.

There are ways to protec t yourself when seeking services from companies that offer debt managers, debt consolidation, or advice, if you decide to file for bankruptcy.

Listen to the representative of the business. Are they reluctant to share information? Does the individual readily give company name, address, and telephone number? You need to watch this person’s body language. It can tell you with actions more than a con man can tell you w ith words.

The con artist knows what you want to hear and he is willing to share it with you. You can bet you are being observed, so watch how you respond as well.

Do you feel that the high pressure salesman wants you to act immediately? Buy now, do not wait. The quicker you agree and sign the contract the less time you have to think of flaws in the presentation. This may indicate that the company is more interested in your money and personal information than in solving your financial problems. The company could be operating a scam.

There are no easy ways to fix problems associated with excessive debt, so if you are told that your payments can be reduced by 50 percent or less, be aware that these statements are rarely true.

A re you told that the situation can be handled quickly over the telephone? Another red flag is waving here. It takes an hour or more to understand someone’s financial condition.

You can go to www.centraltx. or call (254)699-0694. Use these contacts to report a complaint about a company in Central Texas, as well..

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2010-05-06 digital edition

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