Consumer Alert: THE DEBT SETTLEMENT TRAP: THE #1 THREAT FACING DEEPLY INDEBTED AMERICANS
Already struggling with home foreclosures, harsh bank and credit card fees, and other major financial challenges, America’s most deeply indebted consumers are now falling victim to a major new threat: so-called “debt settlement” schemes that promise to make clients “debt free” in a relatively short period of time. Unfortunately, most consumers who pursue debt settlement services find themselves facing not relief but even steeper financial losses. Even the industry acknowledges – though not in its ever-present radio and online advertising–that debt settlement schemes fail to work for about two thirds of clients.
Federal and state officials put the debt-settlement success rate even lower – at about one in 10 cases – meaning that the vast majority of unwary and uninformed consumers end up with more red ink, not the promised debt-free outcome.