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Review 1/26/2009
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UPDATE: AS OF 7 MAY 2009, DEBT REMEDY SOLUTIONS IS UNDER INVESTIGATION IN THE STATE OF NEW YORK BY THE NY ATTORNEY GENERAL. NOT MUCH CAN BE REBUTTED ON THAT - IT'S A FACT.
This is a debt settlement company which has been in existence since 8 Oct 2005 and has not yet even gotten 1 client through a 48 month program because they've not existed long enough as a company to do so.
They presently have 63 complaints in the last 36 months of this writing. They have a cancelation rate of 76% with clients within the first 9-11 months.
The company takes 50% of their fees in the first 3-5 months and then splits the fees and savings over the next 8-10 months. But when the client cancels, they keep the fees (unless coerced by threat of a BBB report, etc.).
The common reason for cancellation is that the company intentionally waits 3-5 months before contacting any of the client's creditors. This is done by the company so that they can then negotiate with a collection company instead of the original creditor. And that has the advantages of a lower settlement figure being likely and also that the collection company by the Fair Debt Collection Act is required to observe a Cease and Desist letter (telling the collection company not to contact the debtor (the client of DRS)).
Bottom lines: The company takes it's fees during the first few months and does nothing at all until the accounts are charged-off. They then begin contacting the collection companies and working for the client. By that time, the client's credit is marred severely due to having numerous charge-offs. And the original creditors and the collection companies continue to make phone calls to the debtor and collection efforts which are much more likely to result in litigation (lawsuits) to collect the debt because they do not hear of any settlement activity or receive any payment during that entire time.
DRS is a member of TASC which is a loose affiliation somewhat akin to a club for settlement companies. It neither regulates or even certifies it's members and has not been involved either in correcting or treating the ethical issues from it's members. Being a member of TASC is essentially meaningless to a prospective client looking for validity with this company.
The savings plan is a self-help program that allows the client to control their own savings amounts. While this may be positive for a disciplined client, it tends to have the result of many undisciplined clients (very commonly the ones seeking help in the first place) not saving-up settlement funds.
WHEN THE CLIENTS FAIL TO ACCUMULATE SETTLEMENT FUNDS IN THIS VOLUNTARY SAVINGS PLAN, THEY ARE THEN CANCELLED AND THE COMPANY - DEBT REMEDY SOLUTIONS - KEEPS ANY FEES PAID UP TO THAT POINT.
A reputable company would be certified with the IAPDA (International Association of Professional Debt Arbitrators) and would split it's fees over the time of a program and would take action before the accounts are charged-off. And would be ensuring their client DOES accumulate settlement funds in an FDIC insured bank.
A recommended settlement company that conducts very ethical practices is Swift Rock Financial Services. They are a Gold member of the IAPDA and have nearly 90 Certified Debt Specialists. They have a 100% success rate in getting their clients out of debt when that client stays the term of the program. And the cancellation rate is significantly lower - approximately 26%, mainly due to clients who simply need to take a Chapter 7 Bankruptcy and cannot afford any settlement program. Mesa Rock Financial is the top debt settlement company in the industry in terms of expansion and aggressive settlements as well, often below 30 cents on the dollar based on my experience.
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