Courts halt deceptive telemarketing for bogus debt counseling

Americans struggling to consolidate debts incurred during the recent economic slowdown may have had their misery compounded if, in their desperation, they fell victim to a scam artist with false promises of debt relief. However, the Federal Trade Commission announced today that a federal judge issued an order barring such deceitful practices.

Three firms that the FTC accused of the practice were shut down and taken into receivership as a result of the court’s action. The FTC says that the companies promised significant debt reduction to struggling consumers in exchange for an up-front fee, and then provided no meaningful services to the client once paid.

The FBI, Secret Service, and IRS are all involved in a criminal investigation of the same firms named in the FTC complaint, but no case has been brought yet in that matter.

Experts say that any debt consolidation service that demands payment in advance should instantly arouse the suspicion of well-informed consumers, and that any such offers should be reported to both the Better Business Bureau and the FTC.