More and more states are cracking down on unscrupulous Debt Settlement firms that charge consumers hefty fees before performing a service. Calling debt settlement “a rogue industry” that gives strapped consumers false hopes while socking them with high fees, New York State’s attorney general, Andrew Cuomo, has announced an investigation involving numerous companies in the field.
Cuomo has recently issued Subpoenas and launched investigations into 15 Debt Settlement companies. The complaints where initiated mainly because of consumer complaints that Cuomo has received from New York residents about these firms over the last several years.
The following firms all received Subpoenas from Cuomo’s office:
1. American Debt Foundation Inc.
2. American Financial Service
3. Consumer Debt Solutions
4. Credit Answers L.L.C.
5. Debt Remedy Solutions L.L.C.
6. Debt Settlement America
7. Debt Settlement USA
8. Debtmerica Relief
9. DMB Financial L.L.C.
10. Freedom Debt Relief
11. New Era Debt Solutions
12. New Horizons Debt Relief Inc.
13. Preferred Financial Services Inc.
14. U.S. Financial Management Inc. (operating as My Debt Negotiation)
15. Allegro Law.
Keep in mind the Attorney Generals office has issued subpoena’s to these companies in an attempt to learn the fee structure, number of clients and whether or not these companies are providing the advertised benefits. At this point Mr. Cuomo has not filed suits against these companies. When the results of the investigation are determined, a decision to move forward with a lawsuit or not will then be made.
Today over 2,000 debt settlement companies operate in the United States, up from just a few dozen 10 years ago. Unfortunately most of the 2,000 companies do not help consumers at all, but rather siphon large amounts of fees upfront and leave consumers worse off than they were before. Make sure to thoroughly research and investigate any company before signing a contract. You should also seek the advice of a qualified financial professional to help you to first determine the best financial strategy for your situation. Just because a debt settlement salesman can make something sound good, doesn’t mean it is the right strategy for you.
Have you had any experience with any of these Debt Settlement Companies? If so, please share your thoughts HERE
4 Responses to “Debt Settlement – 15 Companies under Investigation in New York”
Hi, thank you very much for such an informative article. These days we were publishing reviews about debt consolidation companies on our blog. This articles of yours really made us think again about some companies we thought were doing a very good job per see.. I hope you will keep an eye on those companies and call out the bad ones… We would soon do a post about the topic above and would like to link back to you…cheers
R. MAK.@student loan rate´s last blog ..Students Still Waiting For Loans
Hello Rana,
Thank you for the comment. I did see your post on your site and I appreciate the link. Yes, I do my best to keep my eye on what these debt settlement companies do and pass that information on to consumers. Since there are over 2,000 of these guys it makes it nearly impossible to keep up with them all. However, since the vast majority of them are doing things that are so blatantly against their clients best financial interests, it makes it very easy to identify the companies to stay away from.
I would say based on my experience, consumers shouldn’t even consider 99% of them. I can count the ones that I would “refer my mother to” on 1 possibly 2 hands at most. So the deck is really stacked against uninformed consumers. I say “refer my mother” because that is my litmus test for my clients. If I wouldn’t refer my own mother to a company or program if she needed it, I won’t refer a client either.
Thanks again for contributing and feel free to use my articles as a source in the future. I will be doing in depth reviews on many of the large debt settlement companies and posting them to my blog over the next few weeks.
Damon Day´s last blog ..Debt Settlement Nightmare for Phoenix Woman
Sent payments to those Allegro Law crooks for over a year, to consolidate two credit card debts. I pulled one of them and settled the debt and it is now off my credit report, the one they were to cover – sears credit card – i had sent them over $3,500 – debt was “to be settled for half of what was owed” – this account more than covered for that – when it finally hit me to get a feel for such clearance, i discovered these scam dogs were under receivership – due to fraudulent ways of conducting business. Took me hours to get a hold of Allegro Law’s office – as their web is off of the air, and they said they had like $300 on escrow and I need to continue sending money – with a total of three times the original credit card debt. I sent a certified letter to Allegro and the receivership individual that I was not sending any more money to a dead horse – and demanded my money back….nothing has been heard in the past 4-5 months out of nay of these two entities….they have scammed thousands of people and some of the “attorneys of the firm” are being sued due to not functioning in a correct manner…, lots of us are still hanging with these debts, some have been at court and no one to represent them…and taking the debt from square one…I refuse to give up on my money – I contacted them cause I could not afford the debt and this has taken me to owing it twice….anyone can help all of us recover our monies from these crooks at Allegro Law?
Hello Ali,
It is unfortunate that you and 15,000 other people found yourself victims in this Allegro Law Mess. Unfortunately I fear that it is only going to be the tip of the ice berg because a majority of settlement companies operate with a fee structure typical to the Allegro Model. With so many regulatory changes potentially happening by the end of 2010 and into 2011. There are going to be a lot of programs that end up getting shut down or filing for BK. The lesson for people currently considering signing up with a debt settlement program is simple. Do not sign up with a program that charges all of their fees before doing all of the work. Find a program that uses a pay as you go model and charges a fee based on how much they save you, not how much you owe.
You may already be aware of it but you can go to allegrolawreceivership.com. At that site you can find updates on the receivership process. Hopefully there will be some money left once the attorneys get done with it. They also, I believe are trying to work with creditors in an attempt to work out deals with creditors on behalf of Allegro Victims. So you may find some relief there.
Have you attempted to negotiate with sears directly?