The Rising Tide of Fraud Committed by Debt Settlement Companies
With the unemployment rate in the United States nearing 9%, the highest it’s been since 1983, credit card delinquencies are now at record highs. This of course means that more and more consumers are falling behind on their bills at an alarming rate. Because of this debt settlement and credit counseling companies have seen record growth.
While some of these companies are legitimate and truly do help people with their financial troubles, it is also a sad fact that there are individuals out there that are preying upon the very people that can least afford to be financially victimized. As a crime of opportunity there are an increasing number of debt settlement companies committing fraud under the guise of helping people.
The legislative director of the Association of Settlement Companies, Wesley Young, estimates that there are more than a half-million people that are now actively working with debt settlement services. Young further stated that they are now probably around 1000 debt settlement companies operating throughout the United States.
The problem with the industry has grown to be so widespread that the attorney generals in the states of New York and Illinois have launched investigations into the practices of the debt settlement companies. Lisa Madigan, the Atty. Gen. for the State of Illinois, has already filed lawsuits against two debt settlement companies for engaging in deceptive practices. The Atty. Gen. of the State of Texas also filed suit against a debt settlement company for deceptive and misleading acts last March.
We will no doubt see these cases increase over time. Credit card charge-offs, which are bills that the credit card companies don’t expect to receive payment for, have risen to a record level of 9.01%. That is up from 5.24% a year ago. The percentage of credit card payments that are now 60 days past due or more has now risen to the record level of 4.4%. That is an astounding 35% increase over the past five months. These types of numbers are a harbinger of things to come.
Related Information:
- Negotiating Credit Card Bills – Part Two (Debt Settlement) Learn about how debt settlement can benefit you....
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- Negotiating Credit Card Bills – Part Three (Debt Negotiation) Get our timely advice on how to negotiate credit card debt. Find out how you can save money by negotiating with your creditors....
- Credit Card Companies Offer Help To Cardholders In Debt Credit card companies are now offering to assist cardholders are having trouble paying their bills....