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Local News

Saturday, July 31, 2010

Some debt settlement services are scams
Reineke Family Dealerships - Upper Sandusky
Credit counseling and debt settlement services are a booming business. But some companies are scamming desperate consumers, making a bad situation even worse. Chris Oaks this week spoke to Gail Cunningham, vice president of the nonprofit National Foundation for Credit Counseling.

Q: How widespead is this problem getting?

A: Between 2005 and the middle of last year, the number of credit card accounts 30 days past due has increased by 50 percent. With nearly 7 million Americans who have been out of work for six months or longer, that trend isn't likely to reverse itself anytime soon. Meanwhile, consumer complaints about these fly-by-night companies which promise to settle your debt for pennies on the dollar have doubled in the past two years.

Q: What's the scam?

A: Most often, a service tells you to send them a set amount of money each month. They will then negotiate with your creditors to settle the debt and make the payments directly.

But in reality, they're collecting your payments as "fees" for the service and paying your creditors less than the agreed amount, if anything at all.

To make matters worse, they'll often tell consumers not to contact creditors to discuss their accounts. So you don't know the problem is getting worse, not better, until the creditor seeks a court judgment against you, puts a lien on your home or moves to garnish your wages.

Q: Still, there are many families who are really struggling. How can they tell if a service is legitimate?

A: The more serious the family crisis, the more desperate people become, and the more likely they are to be sucked in by promises of making debt disappear. But you have to remember, no company can guarantee they'll be able to reduce the amount you owe.

The decision on whether or not to settle a debt for less than the balance owed is entirely up to the creditor, and that's a negotiation you can do yourself with a phone call and an explanation of the situation. Another major red flag is if, as I mentioned earlier, the company tells you not to contact your creditors.

Q: You point out that there is a difference between debt settlement and credit counseling services.

A: Yes. Credit counselors work toward repaying your debts in full, and help families make adjustments so that they don't fall into the same situation again. The focus of a debt settlement service is to reduce the amount owed, with very little emphasis on any type of counseling to help people moving forward.

People also need to keep in mind that paying back less money than you legitimately owe will hurt your credit rating more in the long run than repaying those debts in full, even under modified terms, if necessary.

Q: Yours is a nonprofit organization, but does that mean all for-profit services are scams?

A: Not necessarily. Some for-profit companies do exactly what they claim and have a right to collect reasonable fees for providing that service.

However, one has to ask in whose best interest are they serving? Is the goal to maximize the debt reduction in order to maximize their own profit?

We have a rigorous certification process to ensure members of our organization are committed to putting the best interest of the consumer first. Our website, www.debtadvice.org, offers more advice and a tool to help consumers find a certified credit counselor in their area.

"Good Mornings!" with Chris Oaks is heard from 6 a.m. to 9 a.m. weekdays on WFIN. He can be reached by e-mail at , or at 419-422-4545.


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News Briefs Firefighters discover 20 marijuana plants in house
After fighting a house fire early Monday at 815 Howard St., firefighters found 20 marijuana plants in the residence.

"They ran across it and called us," said police Sgt. Justin Hendren with the Hancock County METRICH Drug Enforcement Unit.

Police seized all 20 plants, and Hendren said charges are pending.

High-powered growing lights, fans, and a box filled with dried marijuana were also found in the house, according to a police report.

Investigators said an electrical short started the fire before 3 a.m. Monday.

The blaze caused an estimated $12,000 in damage to the residence, owned by Amanda Crawford. No one was injured, according to the Findlay Fire Department.

Carey announces holiday closing
CAREY -- Carey offices, including administrative, income tax and utilities, electric, wastewater treatment plant, and public works, will be closed Monday in observance of Labor Day.

The curbside recycling program will be held Tuesday through Thursday, Sept. 7-9.

Findlay trooper named sergeant
Trooper Jacob L. Fletcher, assigned to the Findlay post of the State Highway Patrol, was promoted to sergeant Wednesday by Patrol Superintendent Col. David Dicken.

With the promotion, Fletcher will stay at the Findlay post and serve as an assistant post commander, according to the patrol.

Fletcher began his patrol career in 2002 after graduating from the 139th Academy class and has been assigned to the Findlay post since.

Owens announces holiday schedule
The Toledo and Findlay campuses of Owens Community College will be closed Saturday through Monday for the Labor Day holiday.

There will be no classes and the college offices will be closed.

Classes will resume and offices will open again on Tuesday.

Holiday changes ad deadlines
The Courier won't be published on Monday, in observance of the Labor Day holiday.

Because of the holiday, some advertising deadlines have been moved up this week:

Black and white display advertising for Tuesday's newspaper must be placed by noon Friday. Display advertising for Wednesday's newspaper must be placed by 2:30 p.m. Friday.

Color display advertising for the Thursday, Sept. 9 newspaper must be placed by Friday.

Classified advertising and City and Country advertising for Saturday's newspaper must be placed by 2 p.m. Friday. Classified ads for Tuesday's newspaper must be placed by 2:30 p.m. Friday.

Courier business and advertising offices will close at 3 p.m. Friday for the holiday.