Andy's Got Your Back on debt settlement fees - Action News 5 - Memphis, Tennessee

Andy's Got Your Back on debt settlement fees

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MEMPHIS, TN -

(WMC TV) - Be leery of debt settlement groups. Postal inspectors said some consumers who have worked with them end up further in the red.


"They tell the customers stop making the monthly payments to the creditors, stop speaking to the creditors as long as you can make one monthly payment to us," said U.S. Postal Inspector Robert Clark.

Clark said customers are often asked to sign a contract. They're promised if they sign, all of their debt will be paid off.

What is not disclosed, according to Clark, are hidden fees and charges.

"Some of the victims we've spoken to admitted they didn't even ask what the fees were because they were so happy to stop paying all the credit cards and pay one monthly fee that was affordable," he said.

He said some of the cases he's investigated revealed the settlement companies had actually not paid the customers' creditors, despite the customers' prompt payments of their monthly charges and fees. 

"A lot of them had to file for bankruptcy," he said.

Consumers should deal only with accredited credit counseling services that don't advertise "guaranteed debt pay-offs" or "low monthly fees."

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