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Debt elimination fraudSome of the companies are using the debt as the part of the corporate finance strategy, as every business needs finance for expansion. There are generally two ways for collecting finance as debt financing and equity financing. The various types of debts available in the market are loans, bonds and syndicated loans. Individuals also need to finance their needs and requirements like purchasing a car, to pay hospital bills and credit card payments, to buy a house, etc. But, in the process of eliminating various debts, many fraudulent activities are carried out by the institutions to earn some extra.
How the Debt Elimination Fraud Works
There are various consumers seeking debt assistance through various debt companies, programs, books and websites. There are various debt management companies in the market, who claim to provide the services at affordable rates. Few of these companies can also be the part of fraudulent activities. They propose to be legitimate companies, who are providing debt elimination, debt termination and debt reduction services. The main aim of fraudulent companies is to receive money through deceiving the individuals and stealing the amount from their accounts.
The counselors of these fraudulent companies come to explain that the amount of debts incurred by the individual, need not to be paid. As for example for credit card debts, the counselor will try to convince the individuals that the credit card companies are not allowed to lend any amount as loan to its consumers. They makes one believe that the banks and financial institutions are not legally allowed to loan any amount to its customers. And so, if the individual wants to be debt free, a simple process has to be followed for non payment of debts.
The so called counselors or representative convince the individual for not paying any single penny to the creditors. They ask to follow a process; designed by there institution and the legalities would be kept at bay. They also try to convince that the banks won't try to publicize the issue, as it is the matter of there reputation. For understanding the process they ask the individuals to pay them fees, which could be around 15% to 20% of the total debts incurred by the concerned. This offers looks interesting to many individuals as the amount asked for fees is quite lesser than they were suppose to pay. Once the fees is paid and the process is implemented, the scam results start coming, as the creditors are not going to listen to the scraps presented by the counselors.
The creditors would sell the concerned account to any of the debt purchasing company. The debt purchasing company would start dealing with the concerned individuals. And, the whole process starts repeating itself, again. And if the court case is filed against the individual, the fraudulent company would do nothing, but to wait for the judgment. Till date, no one of the concerned individual has won the case. And, it couldn't be, as the base of arguments is not legitimate. Once, the case is lost, the fraudulent company claims that the court is also a part of conspiracy.
Overview
The elimination frauds are carried through a network or by the way of multi level marketing system. It is better to file a complaint against such scams. A written complaint needs to be filed with the Better Business Bureau. For making the case stronger, it is better to provide with the documentary evidence like a letter or receipt through the fraudulent company, bank statement of transferring of amount, etc. The complaint for such incidences can also be filed with Attorney General and the Federal Trade Commission.
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