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State Waging War on Debt Companies

October 15th, 2008 by flanews

The states attorney general is waging war on companies that promise to eliminate or consolidate debt but dont deliver. Complaints against debt relief companies in Florida are up more than 60 percent this year. As Whitney Ray tells us, the AGs office is taking legal action against five of the companies and investigating 31 more.

Hear it Here: Waging War on Debt Companies

Eric Monroe wants to pay off his debt. A debt relief company called his cell phone. Eric turned down their offer.

Im alright. If its up to me I wont put myself in any more debt than Im already in, said Eric.

Chances are Eric avoided a scam. Many companies are promising to eliminate debt for a few thousand dollars up front. Attorney General Bill McCollum says some of them are taking the money and running.

If someone is promising to reduce your debt and theyre not a reputable debt counseling service and theyre asking for an upfront fee, chances are, its too good to be true, said McCollum.

The AGs office has received 1,400 complaints against debt relief companies this year alone.

The webpage for United Debt Solutions claims it can cut your debt in half, and a customer can be debt free in as little as 8 months. United Debt Solutions is one of 5 companies being subpoenaed by the AGs office. The Florida Public Interest Research Group says the debt companies wont tell you all the options

They fail to tell consumers that they might qualify for bankruptcy and they should talk to a bankruptcy attorney. If theyre so deep in debt theyll never work it down, said Florida PIRG Spokesman Brad Ashwell.

The state also filed lawsuits against two other companies this week. The AGs Office settled with one fraudulent debt company. New Leaf Associates was ordered to pay the state 320,000 dollars over a debt elimination scam and was forced to shut its doors.

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