Debt Settlement Firms Scam Clients

April 24, 2010 - PRLog -- A federal investigation into the debt settlement industry conducted by the Government Accountability Office (GAO) has revealed that several private debt settlement firms have misled potential clients by claiming affiliation with government sponsored settlement programs.  Audio recordings have been produced which implicate debt settlement salesmen making outlandish claims about their services, directing potential clients to break various credit and debt laws, and generally claiming to be sellers of “government approved debt settlement ” programs, which is impossible because the federal government does not approve private debt settlement or elimination programs.  

Timothy McFarlin, an Irvine based financial and real estate attorney, warns consumers to be aware and cautious of seemingly legitimate settlement programs.  “The worst thing a person in debt can do is pay for a debt settlement service that does little to nothing to settle any debt.  Throwing money at an unethical settlement salesman is as effective as throwing pocket change into a wishing well because most of the time the debtor ends up broken hearted and deeper in debt.”

McFarlin offers these tips for choosing a debt settlement program:

--Be weary of “government approved” programs.  If the government has approved a program then the government will administer the program.  If one must deal for any reason with a private company offering a “government approved” program then the government should be the entity that refers a person to the private company.  

--Check business licenses and certifications.  Call the agency that is in charge of licensing businesses in the jurisdiction that the business operates in.  This will allow the potential client to review any past complaints against the business or the operator of the business.

--Take the age of a company into consideration.  Go for a company that has been around for as long as possible, one that has a proven track record and history that can be verified.  Shy away from new settlement companies.  Don’t be a guinea pig for some entrepreneur who decided one day to open up a debt settlement company.  Look for a company that has a history of success that is run by financial and / or legal experts.  

--Don’t hope for improvement from an ill performing company.  If a person has already gotten mixed up with a settlement company that is not performing as promised, cut all ties as quickly as possible.  A person who gets the slightest sniff of a scam should turn away and never look back.  If it has already gotten to this point, consult a local attorney for the best advice on how to proceed.

Lastly, it is usually best to deal directly with an attorney to negotiate debt settlements.  “Many settlement companies,” McFarlin says, “do nothing more than act as middlemen for debtors and lawyers.  These lawyers might not even be in the same state as the settlement company.  It is always practical to cut out the middleman and deal locally when discussing debt settlement issues.  This decreases the likelihood of being scammed and reduces communication time between parties.”

About McFarlin & Geurts:
McFarlin & Geurts LLP is a full service law firm representing both businesses and consumers in California, Nevada, Utah and throughout the United States. McFarlin & Geurts attorneys possess a keen sense of the law and markets, along with an astute business background that is invaluable in bankruptcy and business litigation. The McFarlin & Geurts team includes five leading attorneys and supporting staff to assure clients that their needs are placed at the forefront of any engagement. Legal representation and counseling is critical in our complex modern world, and McFarlin & Geurts is driven by a desire for excellence and commitment to provide quality, personalized service with integrity.

Media Contact:
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To learn more about services offered by McFarlin & Geurts Law Firm, visit www.mcfarlinlaw.com.

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