Your BBB® has learned of a new mail scam, posing as a fake arm of the Consumer Financial Protection Bureau (CFPB) that can wipe away consumers’ debt. The lawsuit filed by the Consumer Financial Protection Bureau is suing the fake wing of the CFPB, along with Federal Debt Assistance Association, Financial Document Assistance Administration, and Clear Solutions.
The lawsuit accuses these organizations of using unfair and unethical practices in pursuing debt relief. These organizations promised to eliminate all or part of debts and improve credit scores. The companies claim that debt relief is from the actions the CFPB takes against banks and credit card companies. They claim to improve debts by 60% but ask for $12,000 to $19,000 upfront.
This is strictly illegal, companies can’t collect fees prior to achieving results. Once the individuals pay the fee, they are instructed to stop making payments on loans and credit cards. The creditors would reach out to the individuals, the FDAA would ask them to stop with a ‘notice and demand for verification of debt.’ If not fixed within 30 days, a ‘notice of insufficient response’ is sent.
These practices don’t eliminate debt, and the CFPB denies that this authority was given to these agencies.
If you have received one of these letters, throw it away and report it to FTC.gov. Be extra careful by closely examining the contents of the letter and the symbols being used on the outside.
Remember, always use caution prior to paying for service ahead of time.