Freedom Debt Center

This company sends out "Courtesy Notice" mailers to consumers advising them they are "eligible" for debt mediation services due to excessive credit card debt. The mailers are deceptively designed to look like a government mailing or otherwise imply that services offered are by a government sponsored program. The solicitation displays a round embalm with stars and stripes; lists an account number; claims that enrollment fees have been waived; that the notice is urgent pending approval; and displays a return address which reads "Washington DC 20013. The notice also makes the claim that the consumer’s debt can be reduced by one half of the original amount.~~Our experience with debt negotiating companies is that they attract customers with large credit card debt by claiming to be able to settle those debts for a fraction of their face value. They often claim that their services are more effective than those provided by credit counseling services and that they are a superior alternative to bankruptcy. Advertisements by debt management companies as well as statements by company representatives may lead clients to believe their services are part of a government program similar to the recent bailout of troubled banks. Some companies claim that the US government has grants available to help you with your debts. However they also say that this information is not freely available and that you must buy it from them in the form of a computer disc and a monthly subscription. However it soon becomes apparent that there are no such government programs and that the information you have purchased is useless. The BBB knows of no debt relief programs sponsored by the United States Government.~~These companies usually instruct their clients to stop paying their creditors. Other companies simply collect their fee and advise debtors to save their money to pay their creditors themselves. California law limits the amount of fees debt negotiators can charge but by not collecting the money and distributing it to your creditors companies can remove themselves from the limiting statutes and charge whatever they wish. What they are supposed to do for you while you’re saving up your money is to contact your creditors and inform them that they’re working with you negotiate the amount to settle your debt and ask them stop contacting you. Debtors may not realize that if their creditors do accept a negotiated settlement the amount forgiven constitutes taxable income.