Foreclosure and Loan Modification Blog

Consumer Alert: Don't Be Scammed by Payday Debt Relief Companies That Promise Relief from Payday Loans, It's Wasted $$$

[fa icon="clock-o"] Friday, September 6, 2013 [fa icon="user"] Jake Sterling [fa icon="folder-open'] Scam Alert

Amerihope Alliance Legal Services and attorney Greg Nordt warn consumers:

WARNINGDo not pay fees to debt relief companies that promise that they can negotiate a pay off and stop the payday loan companies from calling you. They can't. They charge a consumer for an attorney to send their payday loan company a cease and desist letter and a letter of negotiation. Neither of these letters with help you in any way more than you can help yourself.  These type of scam companies are preying on payday loan consumer's fears.

The FTC said consumers paid between $300 and $2,000 to debt relief companies who make promises to stop harassing calls from their payday loan holders and to settle their payday loan debt. A cease and desist letter will not stop payday loan companies from pursuing the debt owed to them. It is best to work out a payment plan with the creditor.

You can download a free cease and desist letter on our Free Cease & Desist Letter page.

Exercise your right to request documentation or proof of any debt. That way you're less likely to fall for a phony debt collector.

Attorney, Gregory M. Nordt, Esq. warns consumers to read about the FDCPA (Fair Debt Collection Practices Act) and learn your rights as a consumer. Do not answer questions from debt collectors, even if you have defaulted on a loan.

You should ALWAYS demand the following:

    1. Debt validation letter showing original creditor
    2. Amount of loan
    3. Amount owed
    4. Date of loan
    5. Date of last payment

The debt validation letter should also state whether the company contacting you now owns the debt and if they are licensed to collect debt in your state.shredded-wasted-money Also, if a debt collector has any of your identifying information like date of birth and SSN - please have your bank put fraud alerts on all your accounts, as well as contacting the three credit agencies (TransUnion, Equifax and Experian) and have them put fraud alerts on your credit files too. Report the call to the FTC, the FBI and your state's Attorney General.  Inform the debt collector that the FBI is monitoring and recording all calls made to you.

Report Fraud

If you are suspicious of a payday lender or a person that is calling to help you with payday loans, or you feel you have been the victim of a loan scam please contact the Federal Trade Commission at 1-877-FTC-HELP (382-4357), or online at www.ftc.gov.

If you feel you have been the victim of any scam involving the Internet please contact the Internet Crime Complaint Center online at www.ic3.gov.

Jake Sterling

Written by Jake Sterling

Jake Sterling is Amerihope Alliance Legal Services' Homeowner Liaison. He helps to bring awareness and teach homeowners about foreclosure defense and options to save their homes.

About this Blog

Amerihope Alliance Legal Services is a leading loan modification and foreclosure defense law firm with attorneys licensed in 5 states. We have helped over 7,000 homeowners fight back and keep their homes.

Click to Read Our Super Loan Mod Success Stories

Our goal is to provide valuable information to help homeowners who are trying to obtain a loan modification or to stop foreclosure. You may schedule a free consultation at any time.

Subscribe to Email Updates

Lists by Topic

see all
Quick Foreclosure Quiz

Foreclosure Process Handbook