Small debts can snowball out of control quickly, as late fees and fines accumulate on top of old bills and new bills keep coming in. If you’ve gotten behind on your payments, you may turn to a debt relief agency. These companies promise to help you get out of debt, restore your credit, and get your life back on track. Unfortunately, some of these businesses engage in deceptive, misleading practices – and others are outright scams.
One company that has drawn suspicion for questionable credit counseling and debt consolidation services is Accredited Debt Relief.
Deceived by Debt Relief Agencies
Consumers with less than ideal credit often turn to alternative lending options like payday loans, cash advances, or check advance loans. Federal and state laws have many rules and regulations about what is called “deferred presentment service transactions.” Although the laws are designed to protect consumers, they often disqualify desperate potential borrowers. Some unscrupulous debt settlement companies target these clients, purchasing lead lists and contacting rejected loan applicants.
While these providers initially promise to obtain loans for the applicants to resolve their debts, this can be a misdirection tactic to shoehorn clients into long-term debt settlement programs and sell them debt settlement products.
One common practice used by debt relief agencies is known as “bait and switch.” State and federal consumer protection laws bar this dishonest sales practice, in which a business advertises an item in order to draw customers into the store. In the case of a lender, this often involves telling a potential client that he or she is eligible or “pre-qualified” for a loan product.
Once the prospective client begins the application process, the business notifies them that they are in fact ineligible for the offered loan product and attempts to persuade the customer to purchase a more expensive product or one with significantly less favorable terms. These can include debt consolidation services or a debt settlement product/program that locks the consumer into many months or years of payments.
Sommers Schwartz Investigating Accredited Debt Relief
Some consumers have reported being misled by Accredited Debt Relief, a company that sells debt settlement products to consumers with credit problems. The attorneys in Sommers Schwartz’s Complex Litigation Group are investigating whether Accredited Debt Relief and other companies may have engaged in illegal deceptive lending practices and are interviewing consumers who feel that they may have been victimized or deceived.
If you contacted or were contacted by Accredited Debt Relief about obtaining a loan and believe you were the victim of a bait-and-switch scam or other deceptive sales practice, contact us today.