In the conclusion of a recent federal judgment against a fraudulent debt relief company, an individual has been ordered to pay $7.9 million in restitution to consumers who were bilked out of their hard-earned money. The company, under the name DebtPro 123, promised clients debt reorganization and settlement services. In reality, however, clients received little or nothing in return for their monthly payments. In fact, many emerged from the process in even greater financial turmoil than when they began, which is not an uncommon outcome for consumers in California and across the nation who are seeking debt relief.
A case was brought against the owners and operators of DebtPro 123 by the Federal Trade Commission. In closing part of the complaint against those individuals, the FTC has ordered the operator of the company to pay nearly $8 million. Those funds will be deposited in a fund and used to pay back DebtPro 123 clients who were defrauded by the company.
Clients signed on for debt relief services and made monthly payments to the company. DebtPro 123 was supposed to take on the tasks of negotiating settlement details with creditors and making the agreed-upon monthly payments. What actually happened is that the company put off even contacting creditors until they threatened to sue the debtors. More than half of the monthly payment collected by DebtPro 123 went to pay the company's own fees, leaving very little left to pay down debt.
DebtPro 123 collected up-front fees for their "services," which should be a red flag for any California consumer who is looking for debt reorganization assistance. This example is just the most recent of many incidents in which a debt relief company is revealed to be a scam. With the announcement of the recent federal judgment, it is hoped that some of these consumers will be able to recover a portion of the money they lost to this fraudulent debt relief company.
Source: consumerist.com, "Operator Of Bogus Debt-Relief Scheme Must Return $7.9M To Harmed Consumers", Ashlee Kieler, Oct. 5, 2015