Debunking The Debt Bailout Advertisements

By Author: Stu Lieberman
Total Articles: 2
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Consumers are being inundated with a flurry of advertisements making reference to so-called "Debt Bailouts", or similar sounding programs, ostensibly offered by the Federal Government. The one problem: These advertisements are very misleading. A New Horizon Credit Counseling, a nonprofit credit counseling firm, has been assisting clients who were scammed by some of these companies.

The advertisements in question prominently feature the likeness of President Obama, and often utilize ambiguous language alluding to federal assistance. One such internet advertisement was titled "Federal Debt Relief Program." Stephen Marcus, president of A New Horizon Credit Counseling, comments that "these phony debt elimination companies are blatantly lying. There is no federal consumer credit bailout program." According to Mr. Marcus, many of these companies charge large up-front fees which are collected before the work is done.

"It's unfortunate that these companies prey on those who are facing financial difficulty," Says Mr. Marcus, "Consumers truly in need of debt relief should turn to reputable non-profit organizations, despite ...
... the allure of these misleading advertisements." The Federal Trade Commission has been fighting against unscrupulous debt relief companies, while attempting to steer consumers towards the legitimate firms.
According to the FTC, people seeking debt relief should avoid companies that charge large up-front fees.
In July, the FTC went on the offense against dishonest debt relief companies. This resulted in a change of its Telemarketing Sales Rule (TSR), which now prevents debt relief organizations from charging unreasonable advanced fees or making misleading statements. These new rules will take effect in late September, 2010.

Credit counseling and debt relief services can be beneficial to consumers who enroll with legitimate organizations. Mr. Marcus suggests that consumers thoroughly investigate the company they wish to use, stating that they should "seek a nonprofit organization, avoid high advanced fees, and steer clear of any program that purports to offer a federal bailout."

A New Horizon Credit Counseling Services is a nonprofit debt consolidation organization that has been helping consumers since 1978. For more information about their programs, contact 1-800-556-1548. They can also be found on the web at http://www.anewhorizon.org, or reached via email at slieberman@anewhorizon.org