FTC shutters Texas debt settlement firms
In recent months, the Federal Trade Commission has been using new debt settlement regulations to shutter many businesses that have been fraudulently billing consumers.
This week, the FTC is pursuing legal actions against three Texas-based debt settlement companies that promised consumers they could eliminate 30 to 60 percent of their credit card debt.
“Consumers looking for help with credit card debt should be wary of anyone who tells them to stop paying their bills, to pay someone other than their creditors, or to stop talking to their creditors,” the FTC said in a prepared statement, according to The Dallas Morning News.
The lawsuits were filed against Debt Consultants of America, Debt Professionals of America and Financial Freedom Processing, the news source says. Also included in the lawsuits were the executives of the companies.
FTC officials say the companies charged consumers fees for negotiations, monthly maintenance and even cancellation, the news provider says. In turn, this caused many consumers’ debt to increase from their original totals.
In addition, the agency says consumers should be careful about paying for credit card debt relief before they receive financial assistance.