What the Debt Settlement companies DON’T SAY

I have received a lot of responses concerning the debt settlement blogs I have written which surprised me a bit. It was nice to hear people thanking me for the detailed information and tell me how it helped them understand more.

With all of the conversations I have had I noticed a few things that seem to be a pattern and I wanted to go into a little more detail on it for everyone.

While the below will apply to any company regarding debt settlement after these conversations this specifically applies to National Debt Relief, Credit Associates and Freedom Debt Relief as these were the three main companies people inquired about.

What I have noticed is a lack of transparency and only telling you half-truths or not the full story.

Now is that because they are doing it on purpose because let’s face it, whatever their “title” is they tell you at the end of the day they are there to get you signed up so they are sales people. While there is NOTHING wrong with that the behind the scene issues is what can get you.

If you remember the recent Wells Fargo scandal with employees signing people up for credit cards and lines of credit without their consent there were financial incentives when employees meet certain goals.

So one of the things people have a great concern when calling these companies looking for relief is their credit score. A good majority of people I have talked to do not necessarily have credit problems or really need credit repair, it’s just that their credit card bills have snowballed into a mountain and it’s too overwhelming and they see so relief in sight anytime soon.

These representatives seem to be steering people calling into what is best for the company and not the person calling. Now is that all representatives…. Of course not but these are the stories I am hearing we be wary.

If you are looking at trying to get the credit card companies to drop their interest then you are looking at what is called a Debt Management Program. Anything else will destroy your credit score. Now while there may be programs out there that are different that settling debt for pennies on the dollar the only way that can happen is for you to damage your credit score.

How much damage is hard to calculate as a credit score and report is like a fingerprint, every fingerprint is different thus the damage will be different for each person.

Credit is so specific that as I tell people who contact me that unless I can see the exact credit report for them that they are seeking advice on I can only give them general advice and I HATE giving general advice for someone with a specific goal they are trying to accomplish.

Andi am hearing that people are feeling like they are being double-talked into something they are not 100% sure is best for them.

One thing I have to point out was a story that still sticks in my head and it was from someone who spoke to National Debt Relief, they told him that they could get his then credit card that he owed approx. $19,000 down 30% and save him almost $6,000 ($5,700 to be exact). Now what were they going to do? Basically not tell him that in a few months the credit card company he owed the money to they were going to wait a few months and then the company would contact them offering a settlement of 30%.

So what in the world did they do? In my opinion (and probably yours too) nothing. But welcome to the world we live in. He wanted to see if I could help and I helped him settle it for a total of $8,000.00 saving him $11,000.00

As I have mentioned in past blogs at the end of this will be my email address, broken up to prevent me getting killed with spam but feel free to contact me. While seeing the credit report will help me assess you situation the standard disclaimer is I’m not dispensing legal or financial advice but I will look at your report and tell you what I would do in your situation with my 13 years of hands on experience in this industry.

When calling looking for relief of the financial sorts do not just jump on board with a company and be what the sales term is called as a “one call close”.

Get the information from these companies, think about it, make a pros and cons list. Good question for you reading this is the companies you called did they give you a pros and cons of what they are trying to sell you? if they didn’t then do not think for one second that there isn’t a plus and minus for you with what you are trying to do.

This like most things is a game of leverage, be smart always have a pad and paper with you to write what these companies are telling you (even if you bullet point it) as you will not remember what they tell you as it is your first time hearing this information and studies show most people only retain 15% of new information given to them. This way you now have reference to go back and if you contact someone like me your able to provide me the inforaiton they told you in order for me to provide you an educated opinion on the specific matter in question.

My email is below if you want to email me but please provide me a solid summary in bullet points to what is owed what you hope to accomplish and any additional information you may think I need.

 

Best of luck!

Wayne

 

 

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EMAIL:             Wayne @ wayne the credit guy.com    (REMOVE ALL THE SPACES)

National Debt Relief Blog Part II

 

Continued….

 

So I popped a spam email I use into their system to see what they would send me. In business it is called an Email “Drip System”. It is designed to keep showing up in your email box to remind you of your conversation with them

The first email and what always seems to be in their emails is check out our 15,000 reviews!

Now I’m not saying that the reviews are fake as there is really no way of knowing that but I could not tell you how many times I get calls from companies who say they can help me get 5 star reviews from verified profiles with their computer system bots. When I first got that call that floored me, but hey, it is the digital age.

And these reviews are probably real as most people only make 1 phone call, get the good sales pitch and they are emotionally drained from being overwhelmed with debt so if someone tells you that they can stop the phone calls and save you thousands and the customer doesn’t know or understand what is actually occurring or the future ramifications of what is being done as they are non the wiser. All they know at the moment is someone can help them save thousands which is a wonderful thing.

But if you’re reading my blogs then you’re the type who likes to do some research and not believe everything you read so I applaud that. I can’t count the amount of times I have told a sales person I am not a one call/time close. I need to absorb the new information given to me and then think and make a decision not jump into one on an emotional decision.

So approximately a day or so later I get The 1st email basically says look at all the people that love us. One quote in the email said:

45 years to pay off my debt but with the Debt Reset Program I’m able to pay it off in about 2 years“.

 

Yeah…. I’m going to have to call BS on that one for a few reasons. First is credit cards (or at least all the ones I have seen) will say pay the minimum only and will all be paid off in 28 years and 36 years was the most I have ever seen.

 

The 2nd email came about 3 days later saying what would you do with and extra $6,296 as that’s what they say clients save overall. What I mostly do not like about companies (just a personal feeling on how to conduct business) and of course after the fluff of the email they tell you to call their “Debt Counselors” but in the calls I have made all I observe  see and hear is a sales pitch and I have no skin in the game and don’t care if you work with them I am just pointing out what someone with years of experience hears.

 

The 3rd email approximately 3-4 days after # 2 reminds you to check out how many people like them.

Nothing wrong with that just trying to keep them in your mind and to keep you thinking about making a decision. And email any company would use.

 

NOW..

 

The 4th email is where they in my opinion fall into the same category as CREDIT ASSOCIATES, so let’s look at this one in detail:

Your credit score isn’t quite as important as you’ve been told it is. (THIS IS HOW THEY START IT)

 

If one of your main concerns about enrolling in a debt relief program – which can save you thousands of dollars and years of stress – is potential impact to your credit score, I have some news for you.

 

– Debt relief programs will only impact your credit score temporarily.

– Remaining in debt is much worse for your long-term credit.

– You could waste thousands of dollars on interest charges every year.

– Credit score only matters when you’re trying to take on more debt (a new loan, house, etc.) – but you’re trying to get out!

 

I do not want to attack each line in this as I could have a field day on how they are trying to manipulate you in this one.

And I do not want this to be a sales pitch for me. So Let’s just say credit is the cornerstone of the American economy, so yeah…it’s kind of important since that’s what EVERYONE ASKS you.

It’s now being used for car insurance, military promotion and job promotion, so again I think it is rather important and for them to make that last statement is literally just a flat out lie.

** So one thing I always tell people is if a company has to lie to get you to hire/work with them then how good or comfortable to do you feel about that?

 

So of course they lost me once I received this email and then started to work on this blog.

The 5th email they finally point out that they charge between 18-25% of the debt you owe. Call me crazy but I think that would be something to be discussed at the start and then point out how working with them will affect your credit.

Again…. Kind of important information that should be at least in the first two emails, correct?

So a little detail, if the account has been let go (6 months of no payment) then the account has been charged off. If it hasn’t and you’re looking to just get a company to help lower the interest rates as when you called they said no to you.

 

The final email gives some summary bullet points and I get a bit of a kick how they say in # 7:

  • Transparency is important to us

 

After reading the above I wrote and mentioned sort of points out that to me at least “Transparency” seems to have a different definition to me than it does them.

 

When I look at their “Accreditations” they are all paid memberships so they are not a nonprofit company. And just like with me and my business I will not be a paid member of an organization so I can post their logo and name to make it look like I am here to help a consumer.

 

So as I tell everyone remember “Buyer Beware”, can they help you based on where you are now…. I’m sure they can and if they save you $100 aren’t they complying with the contract? Just like with many scam credit repair companies out there, if they improve your credit from when you started it is a success but would you consider 5 points a success? The legal contract you signed would.

 

BUT

Are they helping you as much as they can? Probably not, after all it’s not your money they are negotiating is it?

 

REMEMBER—  KNOWLEDGE IS POWER!

 

 

Feel free to contact me at wayne@waynethecreditguy.com if you have any questions and PLEASE be as detailed as possible with your situation and ask about my book “The Real World of Credit” to learn A LOT more of how the system works if you are thinking of fixing your own credit.

 

Understanding how the system works is half the job!

 

 

The Microsoft Scam Phone call

This is a fairly popular scam call that has increased lately in my opinion. Now you may ask what does that have to do with credit repair or credit education and I will explain towards the end of this blog or you can skip to the end if you want. The below is a breakdown on the call and what I did when I had a little time to mess with them.

 

HOW IT WORKS:

The first thing they do is “Spoof” the phone number of Microsoft so if you google the phone number it shows its Microsoft’s corporate office, which of course it’s not.

What “Spoof” means:

Spoofing, in general, is a fraudulent or malicious practice in which communication is sent from an unknown source disguised as a source known to the receiver.

*** Which means they can electronically make the number that shows up on your phone/caller ID as a legitimate phone number.

 

How they get your name:

Most of us have our names attached to our phone numbers somewhere on the internet with phone directories to have some basic personal information about you to help try to convince you they are legitimate.

 

So the phone number looks like it is coming from a known or legitimate place when actually it’s coming from a call center of scam artists.

They tell you they are from Microsoft’s technical support department and YOUR COMPUTER had sent them a “critical alert” and it needs to get fixed before your computer has more problems.

SO, I told them when I recently got one of these calls:

“C’mon, this is a scam, people know about this”. Then the gentleman giving me an obviously fake name begins his B.S pitch and says not it’s not a scam, their support department says a critical error showed up and they can give me the license number of my system.

I told them to call me back at 2pm as I’m on the road now as I planned to have a little fun with them in order to write this blog.

 

They call back around that time and I start hitting them with questions to waste their time and get them to think he has got me on the hook.

 

Q- So when did you get a critical alert from “my system”?

Their answer- A few weeks ago and he apologized for not getting to me sooner.

Q- Why didn’t my computer tell me there was an error in the system?

Their answer- this critical error is in the core of their system and has to be addressed from their end first.

Now at this point, I make the “ok, yeah” statements making him think he has me on the hook.

Q- Ok, so what type of computer do I have?

Their answer- we do not have the Hardware information on your computer just the technical critical error from the core system.

 

Then I say, guys I know you’re full of crap and scam artists and do you know how I know that for a fact?

His answer of course was no sir I am not, I am calling you about the critical error alert we received from your computer ( blah, blah, blah stick to the script)

So then I dropped a lie on him that popped his top… (try it and have some FUN!)

“Buddy I know you’re a slime ball and crook because I have had a MAC computer for the last 10 years (I don’t).

So tell me how the hell you can get a critical alert from a system that I don’t own”???

 

His response: Well why did you tell me to call you back to address your problem?

 

I told him since he was a piece of crap trying to steal people’s information I wanted to waste his time to stop him from scamming other people.

At this time he launched into and I kid you not a 45 second cursing fest at me and I do not know how he was able to not take a breath during that time so I was actually impressed that he went on such a rant for so long without taking a breath.

So to annoy him I just kept laughing not stop in an annoying voice for as long as I could to drive him crazy. It worked but I still had to just hang up on him. Then of course thanks to phone technology I blocked the number and I aggravated him so bad that he attempted to call me back 3 times that day but the phone automatically blocked his call.

 

So, now how does this have anything to do with your credit?
What these companies try to do is get remote access to your computer and like most people you have passwords, banking information and personal information on your computer or saved in browser history that could cause all sorts of problems for you if they got their hands on it and cause all sorts of problems for you now and in the future.

That is it for this week, I hope you gleamed some information and knowledge on this and remember that our phones are now the new “junk mail”. Companies set up robo calls and constantly call you with offers.

They have the “throw it at the wall and see what sticks” attitude and other than clicking on the “BLOCK CALL” on your phone that’s all you can do.

Reporting these calls to the “Do Not Call List” is nothing but a waste of your time as they can’t track anything since with technology companies can buy spoofing software as mentioned above so the phone you see is most likely not the number they used.

 

REMEMBER—  KNOWLEDGE IS POWER!

 

 

Feel free to contact me at wayne@waynethecreditguy.com and ask about my book “The Real World of Credit” to learn A LOT more of how the system works if you are thinking of fixing your own credit.

Understanding how the system works is half the job!

 

National Debt Relief Investigation and a story (PART I)

As I always mention at the beginning I am only documenting my opinion on these debt settlement companies as I am entitled to my opinion.

As a finance specialist for over 13 years with debt and credit I reflect back to the beginning when I knew nothing about this industry at all and as I mention and use an analogy for your legal rights it applies the same with this:

“If you don’t know your rights, then you have no rights”.

“If you don’t know your options, then you have no options”.

 

Companies in the debt settlement industry like Credit Associates that started me writing these kinds of informative blogs thrive on a consumer’s lack of knowledge. In fact that lack of knowledge is what keeps them in business.

I personally believe Credit Associates is one of the worst out there. As someone with a knowledge base of over 13 years I can spot the lies that are done in their commercials or advertising spots so I felt the need to point them out so someone doesn’t get taken advantage of.

A gentleman called me and said they read my blog about them and agreed with my assessment and then also spoke to National Debt Relief and then told me a rather shocking story that I will pass along to you today.

He said he had a business credit card at about $20,000 he is being forced to make the decision to let go.

The “Representative” he spoke to (you know… the salesperson) asked if he had any other debt and he said he stated he had a personal target credit card for about $5,000 and another credit card for about $4000.00 but they have been paid on time. It was only the business card that had started to slip.

They told him they would have to do “all 3 cards” in order to help him. They chatted about it and he said how much could you save me on the cards?

I of course was curious myself and when they told him they could get it all down to $21,000.00 there was a bit of silence on the phone as I had trouble believing such a pathetic amount and repeated what he told me to make sure I heard him right. That s right, he owed $29,000 and said they could only get him a savings of $8,000.00.

What scares me is this is possibly the norm. After all is it not the job of sales people to maybe exacerbate how much they could save? If that’s them bragging then oh my, what is their average?

 

HINT—see PART II of this blog (coming next week)

 

I asked him if he had a lump sum to get this all handled to go away and he said he did but not a ton of money of course. I informed him it was idiotic to add the 2 perfectly good paid cards he had to let them go and destroy his personal credit and after some conversation he wanted to work directly with me.

NOTE— This is a 2 part story as I also contact them as a potential client to see what they could do for me.

 

As I always say, a credit report is like a thumb print…. And every thumbprint is different so generic advice that is attached to your financial well-being is not the smartest move. Only by having a full and complete picture of what is going on is the way to truly get the best advice for you and your family.

 

Back to the Story!

I told him to keep his personal credit cards paid and to keep them paid and good. In less than a month I had the company agree to a settlement of $8,000.00

Now the thing you need to be informed about is while reading this is if the bank takes a hit on what you owe them they can 1099 you and the IRS considers that “undeclared income” and you have to give that to your CPA.

That of course sucks but it’s still a hell of a lot cheaper that paying the debt owed. Plus you can always set up a payment plan for it if necessary.

 

AN ADDITIONAL FYI is the bank has to 1099 you if they do in 3 years. If not then they lose the opportunity to take a tax break on it. we had a client get 1099’d 4 years later and a simple general dispute to the IRS got it dismissed and saved the client an additional $1,500.00 of their hard earned money.

 

So why was there such a money difference you may ask? It’s rather simple actually, if you don’t think you can get anything and you get told you can save $8000.00 you are very happy!

But when you don’t know you could actually save $12,000.00 then the $8,000.00 sounds pretty good.

As I always say, the bigger the company the bigger the overhead so you’re not a client you’re an amount.

They will take the 1st offer the bank gives them and then sell you on how good of a deal it is and how it benefits you so they can move onto the next client.

 

So that’s the end of part I of this blog, the next one may be short but it will be from my own direct experience of calling and emailing National Debt Relief as opposed to detailing you the story from a 3rd party person.

 

NOW I want to say that while this person’s experience with National Debt Relief may not be typical if they read this and say that’s not how we do things is possible. I would find it rather improbable that this client just happen to tell me the one bad representative that they have out of the possible hundred (more or less). Especially when it’s combined with my own experience listed in PART II.

 

I will note that the rep never told him how bad this will hurt his credit score and how future lenders will look at him which I feel is a disservice to the consumer.  Now it is possible they were never trained on that but as a credit and financial professional for over 13 years, isn’t that one of the reasons why you would be calling them???

 

Wayne Sanford is a credit and finance expert with over 13 years’ experience in the industry. He has reviewed over 16,000 credit reports and appeared on local and national TV on CBS and is a contributor to many online publications as well as being an Continuing educational provider for the Texas Real Estate Commission.

Have a question?  Send an email to Wayne      wayne@waynethecreditguy.com

Credit Associates Flat out lies in commercials a MUST READ

I had originally posted this in December 2017 and then my awesome computer skills somehow deleted it so i am re-posting it, read as see for yourself!

 

As we get older we seem to fall into certain patterns or habits, so for me every morning I wake up and as I get ready for work I have the morning news on. This somehow happened to me a few years ago, I think it’s automatic the moment you cross over the age of 40.

One of the consistent annoying commercials is one from the debt settlement company called “Credit Associates”. I always get amazed at how TV networks don’t get sued for airing what is flat out lie to the public.

They start almost from the beginning by saying “there is a secret the credit card companies don’t want you to know, if you have more than $5,000 worth of debt you have the right to settle that debt for a fraction of what you owe”.

NOTE/LIE # 1: there IS NO secret…..

NEWSFLASH for consumers reading this ANY book, commercial or Ad if you even see or hear the sales person saying they have a secret that banks don’t want you to know it is such a lie it’s crazy. Example, how can it be a secret if they are advertising to tell you?

It’s a gimmick trick to get you to call so they have a chance of selling you so don’t be a sucker.

Back to my point….

There is no law that says any debt over $5,000 gives you the right to settle on the debt based on what they say in their commercials.

$5,000.00 is probably their bottom line that they can charge before they can make any decent sort of profit that is worth their time and expense on the consumer while dragging out the process.

While I have no clue how they get away with lying like this what I can say is I actually got a solicitation call from them so I jumped up for joy and pressed “1” to talk to a representative.

My representative was named “John” he did not sound like anyone I know named John. I will point out and I said I was interested but I was super curious as is my nature and wanted to know what was “the secret” or law that allowed me to save thousands like their commercial said since I was never aware of or heard about.

Wouldn’t you know it but John didn’t seem to know what I was talking about and went into his script.

I kept interrupting him to say I want to know first what this law is first before seeing what his company can “do to help me”. He kept trying to read through the script and I said “ hey if this information is above your paygrade then that’s no big deal so put me on hold or transfer me to a supervisor so I can get the answer and then back to you to move forward”.

I was giving him EVERY option available to get me the answer (if there was one) and he would not or should I can could not answer the question. I then started saying “listen your company advertises this so why are you not prepared to answer this question which is in the first 10 seconds of your companies commercial or at least be able to transfer me to someone who can at least tell me the answer”?

As I had some time at the moment and justified however long I dragged this out for utilizing the time for this blog I must have been on the phone for at least 15-20 minutes.

Towards the end of him trying to push past my question and finishing his script and I said to “John” that if your incapable or unwilling to answer the simplest question on the 1st sentence of your companies commercial it’s obvious this company is a scam company so answer the question the next time you speak or I am hanging up the phone.

Shocking result of what happen next? I hung up the phone.

What most of these companies do is basically take advantage of your unwillingness to talk to your creditors. The collectors can be jerks and some are nice. Once a bill has gone past the 120 day mark creditors are open to ‘re-discuss” the original terms of the agreement. Now of course to get to that mark your credit score is destroyed and you may be a candidate for credit repair but maybe not as your credit report is file specific. Think of the term different strokes for different folks.

Without any knowledge whatsoever you should be able to get them to give you a minimum of 20-30% discount off of the current debt owed. An experienced person in this industry can go much lower, I have gotten an average when helping clients with this issue anywhere from a 70-90% savings.

Quick story to end this blog, had a client ask me to look at what their in-laws got themselves into and said sure will be happy to give my opinion. It was a debt settlement program, they had several credit cards and they were paying $375 a month into a “pot” so to speak and when the funds grew large enough they would go in , settle one account and so on.

The issue was in all of the fine print and there was a lot of it but on the page with the fees etc it was CLEARLY marked that this “company” was charging “$221.00 a month” to take their money as their fees that they have not performed and would not perform until these particular clients had at least $1,000 to settle debt # 1.

So they were only saving approx. $154 a month towards settling their bills. They were in shock but I said I didn’t understand why they were as this was clearly printed and they said the person didn’t tell them that and they didn’t look at the paperwork and only signed where he said they needed to sign.

I then said, you mean the “Sales person”??

They got silent really quick, and I gave them advice on what to do but said they have no recourse as they signed the papers and the fees were clearly marked.

You can do this yourself and save some money if you want to or if you choose to hire someone make sure you get some solid numbers and make sure you’re getting some good savings. I had a guy who owe $127,000 in unsecured debt and got everything settled for less than $40,000 which included my fees so he saved over $80,000.

That was one heck of a job and time consuming but normally do not deal with something that large typically.

Moral of this story, READ what you sign and NEVER make an impulse buy/decision. If your being constantly called about your decision then it seems they NEED your money, go with the person who makes you feel comfortable, has a background that can be validated by outside parties and follows up with you when YOU ASK THEM TOO.

 

 

 

* Want to learn more about how the credit system works?

Or

Have questions about your credit where you may need my help?

Or

Buy my book for easy to understand concepts of how the credit system works and how lenders look at you.

 

email me today at: wayne@waynethecreditguy.com

If you email me, to make it easier as i am getting a lot of emails and i respond to all of them please provide me a summary of your situation. Include are you paying the bills on-time, have you not paid them in 3 months, how much you owe and what are the total monthly credit card bills you are paying.

MOSt of the people contacting me i am directing to places i have already vetted that i have identified as places that will do what is best for you and your family and not some company.