Beware Of Misleading Advertising From A Few Debt Settlement Firms

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During the past several months, a number of our clients have received very official-looking notices in the mail regarding credit card debt relief, possibly suggesting that there might be some government sponsored program to assist people with excessive credit card debt.

Upon reviewing these notices they turned out to be nothing more than cleverly disguised direct mail advertisements from debt settlement firms. They used terms like “National Council For … ” and “The Department Of … “, complete with an official-looking seal and a mailing address in Washington, DC. Some even resembled an IRS notice or a W-2 form.

Some made mention of “program eligibility” and others made reference to the “Government Economic Stimulus Act”. At the same time, however, nearly all of these direct mail pieces had a disclaimer in the fine print that indicated that they are “not affiliated with or endorsed by any government agency”.

For the record and to clear up any confusion, we are not aware of any government sponsored program to assist consumers with credit card debt relief.

An interesting question that has come up is …

“How did these firms find out that I was
even having any financial challenges at all?”

The most likely way is they purchased your name and address from one of the major credit reporting agencies (i.e. Equifax, Experian and TransUnion). It’s completely legal for them to do this. If you’re a little surprised that information about you is for sale, here are the links where you can confirm it for yourself:

Equifax  /  Experian  /  TransUnion

Note:  We actually called these companies and did a little mystery shopping and asked if we could purchase a mailing list for people having financial difficulty such as drop in credit score, late payment history, etc. They said, ”Yes, no problem.”  

Back To Basics

 

Last night was the season premiere of “24“. As usual, it was non-stop action while Jack Bauer eludes danger and saves the world from bad guys. But there was one particular minute last night that really struck a chord with me … one of the commercials.

It was a commercial from Allstate Insurance. The commercial reminded me of an article I wrote nearly a year ago. Here’s the link to the commercial >>  www.allstate.com/content/refresh-videos/AA_Back_To_Basics.wmv

Although the commercial is ultimately an advertisement for Allstate, they do a masterful job of communicating a much-needed reminder in these difficult economic times.

Nice job, Allstate.

Credit Card Bailout … Your Lucky Day?

During the past several weeks, one question that clients and prospective clients have been asking me every single day is, “What effect is the current financial crisis in the U.S. (as well as the rest of the world) going to have on my ability to obtain a settlement for less than full balance with my credit card company?”

My reply >> ”It’s probably not going to change much at all, at least for the foreseeable future.”

As I probe a little further and delve beneath the surface, what I believe many people are asking me in a roundabout way is …

1. Do you think that maybe my credit card company will go bankrupt like Lehman Brothers and I could get off not paying anything?

2. Do you think that maybe the banks are hurting so much for money right now that they would take just about anything they could get, and maybe I could lucky and settle my account in full for say $0.10 on the dollar?

3. Is there some provision in the recent $700 billion government bailout package that allows for credit card debt relief for consumers?

I wish I had better news for you, but unfortunately the answer to all three questions is no.

For the past decade I’ve witnessed peaks and valleys in the strength of our economy, although nothing like we’re presently going through, and the effect of a credit card company’s willingness to grant debt relief on outstanding balances has been negligible. Strange, but true. It’s stayed pretty consistent in good economic times and bad.

Certainly there have been periods where various credit card companies and collection agencies go through a temporary cash crunch, so they might temporarily loosen their settlement guidelines just to get some quick cash in the door. But the key word here is temporary. Remember, financial institutions are not in the business of permanently taking large losses.

What I continually tell people is that if you are having financial difficulties and you are seeking debt relief by attempting negotiated settlements with your credit card companies for less than full balance, you need to make that decision based upon how things are today regardless of what events may or may not happen in the future. If some massive bailout occurs in the future regarding credit card debt relief, that’ll be a bonus and you’ll certainly hear about it on the evening news.

If our global financial crisis worsens, things might change dramatically regarding credit card debt relief. But if things do dramatically get worse, I think we’re going to have more serious problems to deal with than outstanding credit card debt.

For now, though, it’s still business as usual with regard to credit card debt relief.

Review Of I.O.U.S.A.

Last night I went to see I.O.U.S.A. at a theater near my house and to be very candid I was going primarily for “work-related purposes” since my job for the past 13 years has revolved around credit card debt. In other words, I was looking at this as kind of a continuing education class just keep up with the times and stay abreast of the latest information.

This was the first time I ever went to a movie with a pen and notepad in hand, and I was basically expecting to be sharing the theater with 10-12 other people that dealt with the financial industry in one way or another.

Boy, was I in for a surprise.

I walked into the theater 10 minutes before the show started and the placed was packed. I was STUNNED. Absolutely blown away. I actually had to sit in those seats way down in the front that no one ever sits in because that’s all that was available!

The fact that SO many people turned out for this event, especially when it was not publicized in the mainstream media, was a refreshing realization (for me) that the public at large is deeply concerned about the state of our economy and the massive debt that we are racking up … and the effects that it is going to have on our children and grandchildren, and our society in general, if we don’t do something about it.

I.O.U.S.A. is a sobering documentary based on actual financial data. The movie is very well done and they do a great job of explaining our current state of affairs, how we got into this financial mess and the potential ramifications if we don’t start taking corrective action now. As someone that has worked in the financial industry for many years, even I was a bit startled at the impact that our country’s massive debt load has on our everyday standard of living, not to mention our national security.

For more information:

www.iousathemovie.com

www.agorafinancial.com

 CNBC video with Warren Buffett and David Walker (8-22-08)

I.O.U.S.A.: Live with Warren Buffett, Pete Peterson & Dave Walker

I know it’s kind of late notice, but I just found out about this myself yesterday.

If you’re a little concerned about the state of our economy, you might be interested in attending an exclusive one night event in select movie theatres nationwide tomorrow, Thursday, August 21st. This event will include the critically-acclaimed documentary, I.O.U.S.A., and a LIVE discussion about America’s economic crisis and what we can do to change course.

For more information, here’s the link to the official website:  www.iousathemovie.com

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