Local woman's debt settlement company gets her further in debt

Local woman's debt settlement company gets her further in debt

"I said, you have my paperwork. You know the people I owe. She said, 'Well they're not willing to negotiate before we can do a debt settlement with them.' I said, what am I paying you for?" Robin Myers says. "I said, you have my paperwork. You know the people I owe. She said, 'Well they're not willing to negotiate before we can do a debt settlement with them.' I said, what am I paying you for?" Robin Myers says.

April 2, 2007

By DON DARE
6 On Your Side Reporter

KNOXVILLE (WATE) -- An East Tennessee woman believed a debt settlement company would help her get out of debt. Unfortunately, she went further into debt instead.

If you're in debt, credit counseling can be a lifesaver. A management company can advise you how to use credit wisely, establish a workable budget and, if appropriate, arrange a repayment plan with your creditors.  

But Robin Myers found a company you need to know about so you don't have a similar experience.

When Robin was looking for help to lighten her heavy debt, she found Consumer Credit Counseling of America listed online.

"I said, do you have offices local? She said, 'We have offices all over the United States,'" Robin says.

After she signed up, Consumer Credit Counseling of America put Robin in touch with a law firm called Hess Kennedy, out of Coral Springs, Florida. They sent some papers and requested fees.

"She told me how much it would be to start the initial enrollment, which was $205," Robin says.

Beginning in September 2006, Robin sent the law firm money every month. It totaled $1,500.

But suddenly Visa garnished one of her paychecks. When she called, Robin learned Hess Kennedy had done no negotiating.

"I said, you have my paperwork. You know the people I owe. She said, 'Well they're not willing to negotiate before we can do a debt settlement with them.' I said, what am I paying you for?" Robin says.

6 On Your Side contacted Hess Kennedy and asked to speak with a manager. No one called back.

But in a cover letter, Hess Kennedy says it provides legal services in relationship with Consumer Credit Counseling of America. The agreement says clients make one monthly payment to Hess Kennedy and the law firm will attempt to negotiate a favorable settlement with creditors.

However, Hess Kennedy also says, "We will not remit a payment unless your creditor has agreed to a full settlement."

Faith Tapp, president of the Consumer Credit Counseling Service (CCCS) of East Tennessee, says people have to be very careful when they talk to a debt counseling company.

CCCS provides several services. One is a debt management program designed to help people overwhelmed by debt.

"We create a budget for them to pay their living expenses and create a debt management plan for them to pay themselves out of debt," Tapp says.

For a donation of about $20 a month, counselors help hundreds of East Tennesseans each month.

CCCS has pre-arranged agreements with major credit card companies.

As counselor Marcy Frankel explains, "We would take everything you owe, all your debts and consolidate it into one lump sum. The clients would pay us every month. Then we would disperse the funds to the creditors every month."

On ripoffreport.com, Robin found that Hess Kennedy has complaints against it from people around the country. She hopes others don't make the same mistake she did.

Late Monday afternoon, Robin called 6 On Your Side to say she got a check in the mail from Hess Kennedy for $810. She says there was no note or explanation, just the check.

At the Better Business Bureau, 6 On Your Side learned Hess Kennedy has an unsatisfactory record with half a dozen complaints.

Consumer Credit Counseling of America also has an unsatisfactory record with the Better Business Bureau, with more than three dozen complaints.

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