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Millions lost in phony Florida debt consolidation companies

On Behalf of | May 27, 2017 | Chapter 13 Bankruptcy, Firm News

Many consumers in Florida have experienced financial difficulties in the past few years since the economic downturn. Certain residents considered debt consolidation loans as a means to improve their financial position and repair their credit. Unfortunately, three men from South Florida created even more problems for the people that were already in financial trouble through fake debt relief companies.

The men had established 11 phony companies, according to officials from the Federal Trade Commission and the Florida Attorney General’s Office. Consumers paid these companies each month, expecting that their debts would be paid, settled or dismissed. However, the victims discovered that their debts were not paid. In fact, they learned that their credit scores were even lower and some accounts were in default. Some had to file for bankruptcy.

The companies and the three men have been charged in federal court with violating the FTC Act, the FTC’s Telemarketing Sales Rule and the Florida Deceptive and Unfair Trade Practices Act. Officials contend that the companies had sought nonprofit status to create authenticity. They gained clients by promising low interest rate loans and monthly payments. Fees and payments were debited from bank accounts; however, the debt consolidation loans were never established.

Financial hardships can occur for anyone. Debt consolidation loans are a valid solution for many consumers and should be considered as steps are taken to regain control of finances. Yet, it is important to seek guidance from a reputable source to avoid illicit activity. A knowledgeable Florida bankruptcy attorney can be a valuable source of information. An experienced lawyer can help clients evaluate their financial situation and develop a plan best suited to get them back on the right track.

Source:, “FTC, Florida AG, halt massive debt relief scam that took milllions“, Susan Salisbury, May 23, 2017

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