AFFIL Agrees with the American Bankers Association!
A story in this morning’s New York Times describes how the burgeoning debt settlement industry profits by offering false hopes to consumers overwhelmed by credit card debt. For fees that typically amount to fifteen percent of the amount owed, these companies promise that consumers will be able to pay off what they owe for only forty cents on the dollar.
This is, of course, too good to be true. What generally happens is that the companies get their fees, while the consumers end up “in a deeper hole than ever.”
There are now about two thousand of these predators, and their ads seem to be everywhere but on NPR. For one example, simply do a Google search for “credit card debt” — or “consumer debt” or any similar term — and check out the ads that appear at the top and along the right hand side of the search results.
The Times quotes an American Bankers Association executive saying that these debt settlement companies are “very harmful to both creditor and consumer.” For once, we find ourselves in agreement with the ABA.