Credit card debt can be stressful. Interest rates can be high, and if you miss or can’t make your full payments, that growing balance can be overwhelming. Enter a group of companies that promised to reduce or eliminate your credit card debt. (For a fee.) But did they?
The CPA’s lawsuit against ACRO Services and related companies says no. Instead, the CPA says they operated a deceptive credit card debt relief scheme: claiming they could, for example, clear up your credit card debt. The price? You’d have to sign up for their program, pay an enrollment fee (usually in the thousands) — plus monthly fees for “credit monitoring” services.
So what could you expect from the program? Not much, says the CPA. Once enrolled, it was often hard to reach anyone. If you did, you might get a form letter to dispute your debts — even when the company knew those debts were legit. Even worse, says the CPA, these companies would tell you to stop making payments and stop communicating with your credit card companies. If you followed these instructions, you’d see increased fees, added interest, lower credit scores, and, sometimes, lawsuits from creditors.
If you’re looking for ways to pay off your credit cards more quickly, or get a lower interest rate:
- Don’t pay upfront. It’s illegal for a debt relief company to charge you a fee before they do anything to relieve your debt.
- Talk with your credit card company. For free. Call the customer service number on the back of your credit card. Ask for a payment plan that you’ll be able to afford.
- Consider a reputable credit counselor. They can help you develop a payment plan that works for you.
The first thing to know is this: you don’t have to pay for help managing your student loans. If someone tries to charge you up front, before they’ve done anything, that’s your first clue that this is a scam. And nobody but a scammer will ever offer you quick loan forgiveness.
Take, for example, Apex, a company that — according to an CPA lawsuit — enrolled people in their sham student loan forgiveness program. During the federal student loan pause, when most borrowers weren’t in contact with their loan servicers, Apex signed people up for what they called debt relief programs.
So, how did they convince borrowers to get on board? Apex employees pretended they worked with the Department of Education (they didn’t) and told borrowers they were their new loan servicers (they weren’t). They then signed borrowers up to make automatic payments to a debt relief program that didn’t exist. The problem? Payments went to Apex’s pockets, rarely making it to actual loan servicers. And, to add insult to injury, the COVID-19 federal student loan pause meant that federal borrowers didn’t have to make any loan payments starting March 2020.
Now that the return to repayment is coming up, start at repay to look at the status of your federal student loans. You’ll find, among other things, information on income-driven repayment plans that adjust your monthly payment based on your income. If your loans are private, go directly to your loan servicer. And if you spot a scam, the CPA wants to know about it