credit cards

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Debt Relief Operation Banned & Other Financial Headlines

August 23, 2011 Credit Manager Credit Repair Articles & Resources, FTC Updates

FTC Permanently Halts Operation that Allegedly Made Bogus Claims about Eliminating Consumers’ Debt

Two Principals Banned from Selling Financial Products and Services

As part of its continuing crackdown on scams that target consumers in financial distress, the Federal Trade Commission settled charges against a debt relief operation that allegedly lured consumers nationwide into paying thousands of dollars in up-front fees, but in most cases failed to actually reduce their credit card debts, and in many cases left them even deeper in debt. The proposed FTC settlement orders ban the company, Debt Relief USA, Inc., from doing further business, and ban company principals James Wojcik and Valerie Leath from marketing any financial products and services. Litigation continues against the two other principals, Kelly Reilly and Alvin Bell.

According to the FTC’s complaint, Debt Relief USA and its principals made deceptive claims that consumers who enrolled in their program could eliminate 40 to 60 percent of their credit card debt and be out of debt in 24 to 48 months. The FTC complaint charges that few consumers received the promised results.

Under the proposed settlements, Debt Relief USA, Wojcik, and Leath are required to protect and properly dispose of customers’ personal information. They also are prohibited from misrepresenting relevant facts to consumers. Read More>

Your Social Security Disability Income Is Probably Safe…For Now

Consumer Advocate: Simple Phone Hack Exposes Credit Card History

Wells Fargo Will Charge Some People $3 to Use Their Own Money

Resolving Medical Debt Disputes

No comments credit cards, debt relief USA, debt settlement scams, financial distress, ftc, ftc crackdown, phone hacks, unpaid medical bills, wells fargo fees

Can Collection Agencies Charge Interest On Assigned Accounts?

August 16, 2011 Credit Manager Credit Repair Articles & Resources

Collection agencies are in the business to make profit just like any other business, but what you may find startling is just how much profit they can make on debts either purchased or assigned.

Reading an article today, we see a very basic question from a person whose credit card was still charging interest even though the card was cl0sed. People often assume if a credit card account has been charged off that the interest fees will cease because the debt is no longer active. In reality, the credit card company isnt charging you interest anymore but the collection agency is within their rights to add penalty fees.

State law determines what a collection agency can charge you in fees and penalties, but whats alarming is that they can continue to use the credit card contract terms and charge that interest charge. It’s a big deal because interest allowed in your state may only be 6 or 7 % but the original credit card agreement may have a rate as high as 24%.

It doesnt take a degree in finance to see that you will probably never pay off the debt if every penny is going towards interest with every payment you make. Its best to negotiate a settlement with the agency at the onset if you can come up with a payoff. You can read more here about the credit card interest rates as well as a link to the contracts for the card issuers to review terms.

No comments bill collectors, collection agencies, collection laws by state, credit cards, interest rates, legal interest rates

Credit Cards: Authorized Users & Obligation

August 5, 2011 Credit Manager Credit Repair Articles & Resources

Sarah had defaulted on her credit cards due to a prolonged job loss. Ultimately her credit was impacted and she was no longer able to keep going with the credit card payments. While she was considering filing for bankruptcy, her daughter went to purchase a new car. The dealership advised her that she was past due on 2 Chase credit cards. She had never opened any Chase accounts but remembered she was added on to her mother’s cards while in high school as an authroized user only. She would have paid much more in interest had the lender based their decision on her current credit score – which was impacted by the past due credit cards.

People often think that as an authorized user they are liable for the debt. This is not true. The authorized user never agreed to pay the card and is not legally bound. It’s a common problem — creditors reporting the default to the AU’s credit reports. If this has happened to you, contact the credit bureaus and advise them (in writing) that you were only an authorized user (not a second account holder) on the cards and they should not be reported in default on your credit reports. A creditor cannot hold your credit reports hostage in an attempt to illicit payment. A legal contract was never entered into with authorized users and should not be penalized for the default.

It’s also important not to use the card anymore if it is delinquent. Often, the limit is already cut off if the card is past due, but if its not, don’t take it as a license to keep charging.

An authorized user is not the same as a legal cardholder who signed a contract to repay the loan.

No comments authorized user, credit cards, credit reports, default