With vicious debt on the rise and a population in the grips of populist entitlement fervor, you could have guesses that those seeking to collect on consumer credit were eventually going to have to lift up the for a little while. Eventually is now.
New York Attorney General Andrew M. Cuomo has begun a national investigation into the debt- settlement industry, which he said preys upon consumers facing high credit-card debt.
Cuomo has subpoenaed 14 companies and one law firm to learn about their fee structures and how many people have benefited from their services, according to a statement by his office. Some companies have falsely advertised that they can reduce credit-card debt by as much as 75 percent through negotiations with creditors, according to the statement.
The debt-settlement plans usually assume that consumers will save money over one to three years, and those savings will be used to pay the company's fees and any negotiated settlement, according to the statement. Most consumers can't meet the savings requirements because of precarious finances, it said.
We are all for keeping debt collectors on a short leash. Things can get nasty quickly. Be this as it may, we wonder about sentences like this:
Some companies have falsely advertised that they can reduce credit-card debt by as much as 75 percent through negotiations with creditors, according to the statement.
Surely, somewhere, one of the clients (Grandma Davis?) of these comany's has managed to reduce debt for one of their customers by 75%.
Sloppy reporting? Overaggressive prosecutions? Both? Neither?
Cuomo Starts National Debt-Settlement Industry Probe [Bloomberg]