In August, the FTC took Debt Relief USA to court. Debt Relief USA is alleged to have misrepresented the services they offered and charged more than allowed by statute for their services.
Debt Relief USA, Inc.(“DRUSA") is a Florida for-profit corporation operating in Texas. DRUSA transacted business in this district and throughout the United States. DRUSA advertised, and sold debt relief services to consumers throughout the United States. DRUSA targeted consumers with substantial amounts of unsecured credit card debt, often claiming that participation in their debt relief service would result in the elimination of 40 to 60 percent of consumers’ debts and that participating consumers would be debt free in 24 to 48 months. DRUSA advertised debt relief service on the Internet, (websites to avoid: www.4debtreliefusa.com , www.drusainfo.com , and www.debtreliefusa.us ) as well as through national television and radio advertisements.
Consumers who called one of DRUSA’s toll-free numbers were connected to a sales representative. These representatives often told consumers that they could save a significant amount of the debt owed to their creditors by making low monthly payments to DRUSA that would cover settlement of the reduced debt and DRUSA’s fees. In numerous instances, DRUSA’s sales representatives stated that consumers’ debts would be settled in 36 months and provided settlement averages such as 40 to 50 percent. DRUSA’s sales representatives typically told consumers that, in order for the debt relief service to work, consumers had to stop making payments to creditors and cease communications with creditors. These representatives told consumers to rely on DRUSA to communicate and negotiate with consumers’ creditors. In some instances, sales representatives stated that, based on DRUSA’s special relationships with creditors, DRUSA could negotiate significant discounts for consumers.
Consumers who agreed to enroll in DRUSA’s debt relief service were required to authorize a bank account debit over the telephone for the initial monthly payment prior to receiving enrollment documents. Among the enrollment documents were a Client Settlement Agreement forms authorizing recurring monthly withdrawals from consumers’ bank accounts, and a form used to identify the amounts owed to various creditors. DRUSA charged consumers fees, including administrative fees, monthly maintenance fees, and negotiation fees. DRUSA took these fees from the monthly recurring withdrawals consumers authorized. Pursuant to the agreement, administrative fees were non-refundable unless consumers cancelled enrollment in DRUSA’s debt relief service during a seven-day period following enrollment.
The FTC complaint alleged that DRUSA never contacted the consumers’ creditors. DRUSA was simply taking the money and lying to its customers.
Does this story sound familiar? If so, contact Seth Rosenberg of Smith & Rosenberg, PLLC or Mark Walters of Walters Law Firm PLLC. They are the only attorneys in the State of Washington who will take on the debt settlement companies. Seth and Mark take cases on contingency and are only paid if you see the return of your money. Seth and Mark’s track record is truly impressive in seeing the return of your money. Act today to enforce your rights!