It's scary to see loan modification companies offering debt settlement services. The biggest threat is companies charging exorbitant fees at a time Americans are financially vulnerable
San Diego, CA (PRWEB) July 9, 2009
A wealth of online debt help education warns consumers about bankruptcy, and dubious consumer credit counseling. Yet, little is known about abusive debt settlement companies - something Debt Free League wants to change.
The debt settlement company negotiates agreements with creditors for a reduced payoff of a consumer's unsecured debt. The settlement examples at DebtFreeLeague.com illustrate much of the proof.
However, Debt Free League cautions that the debt settlement industry has been targeted by inexperienced and unethical companies.
"It's scary to see loan modification companies offering debt settlement services. The biggest threat is companies charging exorbitant fees at a time Americans are financially vulnerable", states G. Hernandez, Operations Director of Debt Free League.
Recently, the Illinois Attorney General filed a lawsuit on Debt Relief USA alleging the debt settlement company charged an upfront fee of up to 10% of the consumer's debt, and upon settling one of the consumer's accounts, charged a settlement fee of 13% on the amount saved. The company also failed to reduce consumers' debts as promised.
Hernandez warns, "Legally, no one can guarantee to reduce a debt for a specific amount.
An other issue is the low-balling practice that has dug debtors deeper in the hole. Some companies withhold the fact that enrolled debts will have balance increases due to the continued accrual of interest and fees.
However, Hernandez contends that his ethical organization is one of the good guys helping consumers and small business owners receive vital debt relief.
About Debt Free League:
Debt Free League offers a debt settlement program that helps consumers and small business owners resolve financial hardships by negotiating settlements on personal, medical, and business debts. Free phone consultations are available by calling (800) 213-9968.
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