Freedom of Speech and the Debt Settlement Industry
Credit Alliance Group’s Take
Debt settlement has been scrutinized for years. The community tends to look at the negative aspects of the industry without seeing any of the positive. With the Constitution infringing the right to freedom of speech, it has born websites, blogs, articles, etc. that allow citizens to express their concerns or praises on certain subjects. God Bless America! With that said, complaints have been posted about our corporation that we would like to clarify; it is our right as an American. Please note that a greater portion of the complaints listed are mere criticisms on the industry as a whole. Hopefully this article will squash any unjust truths that have affected the integrity of Credit Alliance Group (CAG).
COMPLAINT 1 – CREDIT SCORE
Sadly, anything that you do other than pay your creditors EVERY month in FULL and ON TIME will have an impact on your credit score. We at CAG offer a HARDSHIP Debt Settlement program. We help consumers that can no longer pay the full amount of their unsecured debts due to adversity avoid bankruptcy. With that said, clients enrolled in our program are not, or will shortly not be, paying their creditors; thus causing their score to be affected, or soon be affected. We are doing nothing more than what is inevitable. No creditor will negotiate an account that is current.
COMPLAINT 2 – VOLUME OF CALLS
In a settlement program, the client makes the choice to not make monthly payments to their creditors. Thus provoking the creditors to call and try to receive payment. But, as a client enrolled into our program, we send a Cease and Desist letter along with a Power of Attorney to the original creditor or collection agency in charge of the account(s). We then send the client a DAAN module to connect to their home phone that will notify the creditor that you have retained a third party representative to handle their unsecured account(s).
This will regulate the amount of contact that the client will receive from creditors or collection agencies. It will not stop it completely. Original creditors, once they become aware that they will not be receiving payment, more than likely will sell the clients’ account(s) off to a collection agency. We will then have to contact the new company in charge of the account. Unfortunately, companies do not notify us of this when it happens. As a client, you are responsible for notifying us of this. That way we can contact the new company ASAP and help with any collection calls.
COMPLAINT 3 – FEES
ALL fees are disclosed in our contract that EVERY one of our clients sign upon enrolling – PLAIN AND SIMPLE.
COMPLAINT 4 – NAME CHANGE
We are still proud to be named Credit Alliance Group. We do though have different departments within our company with specific names. They are as follows:
1. Credit Alliance Group – Our Credit Officers responsible for initial enrollment
2. Client Services Group – Our Client Relations Department
3. Credit Alliance Services – Our Administration Department
4. Alliance Invoice Group – Our Accounting Department
COMPLAINT 5 – DEBT AMOUNT GOING UP
When a client enters the settlement program, they make the decision to stop payments to their creditors, if they are not already delinquent. The creditor(s) then will continue to tack on additional interest and fees. One of the reasons why we quote our clients between 40 and 50% is because of this. We will go in and try to settle at the lowest percentage that we can with the verified debt amount that we validate at the beginning of the program. By settlement time, we should be able to settle the account at no higher than 50%. We are able to do this with the good relationships that we have each lender.
COMPLAINT 6 – BBB RATING
Due to the nature of the business, it is practically impossible for a debt settlement company to have a rating other than a “D” or “F”. ”Debt Settlement companies will be given these ratings despite the number of consumer complaints, how those complaints have been resolved, or the business practices of the settlement firm under review “ as stated on the Credit.com website. What consumers are advised to do is look at the amount of complaints that the company has. We have had only 26 complaints within the past 3 years, 20 of which have been resolved. If you would like to delve further into this, please check out the article at:
And then refer back to the BBB website at http:///www.bbb.com
COMPLAINT 7 – CUSTOMER SERVICE
Here at CAG we maintain a professional and proficient client relations department. What needs to be realized is that we handle an abundance of accounts. We are here to help everyone that utilizes our services and will do everything within our power to help the client succeed in the program designed for them.
It has been mentioned that previous clients have been handled unprofessionally by our customer service team. We do apologize to any client that has received this sort of treatment. It is completely unacceptable. With that said, we need to know this feedback ASAP so that we can get the situation resolved. We can’t fix the problem if we are not informed of it. All of our calls come through a switchboard. My suggestion would be to ask the receptionist the name of the manager of the department that you have a complaint with, extension, email address, and then asked to be transferred. You may get a voicemail, but as stated, we handle a plethora of client accounts. We will get back to you as soon as possible.
COMPLAINT 8 – DOING IT YOURSELF
Consumers do have the capability to settle on their own. However, most are not disciplined enough to do so. That is where we come in. We have proven methods and tactics that enable us to negotiate to lower amounts then they would on their own. Once again, we have established relationships with lenders that allow us to settle for less.
COMPLAINT 9 – TAX CONSEQUENSES
With taking the debt settlement approach, we settle the clients’ accounts for on average between 40 and 50%. The remaining balance is forgiven. The creditor is then required to report the cancelled debts to the IRS if the cancelled balance is $600.00 or greater. The positive to this is that if the client does end up having to owe taxes on the cancelled balances, they obviously saved a great deal of money. Generally that amount plus the taxes will still be much less than what they owed to begin with.
However, the IRS does not require taxpayers to report forgiven debt if the tax payer was insolvent, owes more than they own, at the time the creditor forgave the debt. The majority of the people in serious debt help, i.e.: our clients, have a negative net worth and are therefore insolvent.
When it does come to tax time, we would suggest getting professional tax advice specific to your situation. The IRS does have an insolvency form that can be completed in order to offset any possible 1009 form issued by a creditor, if you qualify as insolvent. The form is listed as FORM 982 and can be found on the IRS website at http://www.irs.gov.
COMPLAINT 10 – BEING SUED
The creditor has every right to sue to collect a debt. The good thing is that if a creditor takes the client to court, they will have proof that they are actively working to repay the debt. It looks a lot better to the judge when you show him proof of the program. Creditors are less likely to take you to court because they look like bullies when you’re actively working to pay them back.
In the event that a client is sued during the program, we will attempt to settle the account so that the creditor does not continue to pursue legal action. However, the account will more than likely be settled at an elevated amount. Going into the program, each client needs to realize that there is the possibility that the creditor could take legal action, which is ALSO disclosed in the contract.
I hope that this clears the air on a lot of the fallacious accusations that have come up on Credit Alliance Group as well as the Debt Settlement industry. As stated before, feedback is always good; it is our right as an American to give it. With that said, I hope that any concerns would be addressed with us before laying it all out on the table for America to see without first finding out the facts.
"We provide you with exceptional customer service designed to effectively achieve your goal of becoming debt free. Creditors will stop calling. Save 40-60% off your credit card debt. Attempting to resolve a debt through settlement is looked upon more favorably than filing bankruptcy."
Sound familiar? Don't believe the hype. After enrolling in their program the volume of calls I receive from debt collectors INCREASED exponentially. My guess is creditors are beginning to become aware that these guys are full of BS. CAG will tell you to forward these calls to them, or send them the information to file a complaint with the FTC. Once you do, they send you links to the FTC and/or prompts on what to tell your creditors when they call. Essentially, you end up doing their job for them.
Their customer service is absolutely horrendous. E-mails to them frequently bounce back or go unanswered. In the rare chance that you do hear back from them, it is not for at least a week. This may be acceptable from a creditor, but not from someone who is supposed to be working for YOU. Talking to them on the phone is even worse; they treat you just like those awful credit collectors. Their disdain for your situation and concerns is clearly apparent.
Once they have a few payments, they quickly change. If you try and cancel and get your money back, they inform you of "service fees" that just happen to total the sum of your payments to them. I've worked with the following reps at CAG and all have been awful:
In the time since I've signed up for debt settlement with CAG I've received several debt settlement offers from my creditors. They mostly range from 40-60% off of my total debt. I personally negotiated one down to just under 40% and am working on the others. Debt settlement is a hot topic at the moment. Do your research online and buy a book or two at Borders. Don't pay CAG for something you can do yourself. Save yourself the headaches!