Burlington, NC -- You've probably seen the signs or heard the TV and radio ads, offering to help you consolidate your debt. It sounds like a good idea but some companies could be taking advantage of people who are already struggling.
Robin Sheppard of Burlington, NC was trying to get on good financial footing. She wanted to reduce her debt and sought out a credit counseling service in her local yellow pages, or so she thought.
Sheppard told News 2's Liz Crawford, "I was excited and I was happy to put a dent in the debt that I owed."
Robin sent an enrollment fee to what she thought was a local service. Turns out, it wasn't a counseling service but a firm called, Consumer Law Group.
"I feel like I was really taken advantage of, definitely", said Sheppard.
After sending a few more payments, Robin received her first statement. It revealed that no money had been applied to her creditors. After already sending in $700, she was then told this:
"They take all your first five payments and then after that, the next 17 payments, they'll put $60 towards your debt and the rest they keep."
Despite that shock and setback, Robin tried to make a few more payments before losing her job. She could no longer afford the payments and cancelled her account. $922 later and only a few pennies to show for her creditors.
"The last statement that I received was in September and that showed two cents credit", recalled Sheppard.
This story does have a good ending. Turns out Robin was one of 650 North Carolina consumers who paid Consumer Law Group for debt relief.
The North Carolina Attorney General filed a suit against the company and won back $1.2 million that was taken from North Carolina consumers.
Here are a few tips to protect you from falling victim to similar schemes. Make sure you know, under North Carolina law, it's illegal to collect upfront fees for debt service. Try to contact your creditors directly. They'll usually work with you. Or go through a non-profit credit counselor through the National Foundation for Credit Counseling at 1-800-388-2227 of www.nfcc.org
Find more tips on the Attorney General Website
WFMY News 2, North Carolina Attorney General