Florida AG warns against debt settlement scams

By Sam Craine on Mar 12th, 2010

Many consumers may have been affected by the recent economic downturn to the point where they can't handle their debts.

However, Florida Attorney General Bill McCollum said recently that consumers who are approached by credit repair or debt settlement companies should consider these services with caution. Last year, his office received a number of complaints about such services, making them two of the top concerns faced by the attorney general.

"Consumers who are seeking legitimate assistance are being deceived and often required to pay substantial up-front fees that put them even further in debt," McCollum said.

Regarding debt settlement, some organizations may approach consumers with the promise of being able to pay off a smaller portion of what they owe on things like credit cards. However, these organizations may require high fees up front, and then do not deliver on their promises.

McCollum's concerns are similar to those expressed recently by Lisa Madigan, the attorney general for Illinois. Madigan submitted legislation that would require these companies register with the state before trying to provide services for people in the state.

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