On Your Side Alert: Warning about credit mediation offer

A piece of mail puts one viewer one edge. She was told she owed thousands of dollars in debt. The company sending the notice said it could correct the problem for a fee. Before sending any money she called The On Your Side Investigators.

The letter showing up in local mailboxes is enough to make anyone stop and pay attention.  It claimed a viewer owed 15-thousand dollars in credit card debt. The fix,  join a mediation program for 300 bucks. If you do, that 15-thousand could be reduced to less than nine thousand dollars.

Tom Gallagher, with the BBB says if you see one of these letters, don't respond and don't give up your cash. "It is going to end up costing you money, you are going to agree to prepay for this, three or four hundred dollars is what was happening to the area consumer. Don't do this, it is isn't right. If you want to get something worked out with your credit card company, call your credit card company. They are the people you have the relationship with," he says.

The company sending the letters is ADM or American Deb Mediators located in Dallas, Texas. It has an "F" rating with the BBB. There are over a hundred complaints, mostly about advertising issues and many consumers complaining about the same thing our viewer experienced. Their credit was in good standing and they have no debt but the letter stated otherwise.

We had a lot of questions for this Texas company. We wanted them to address the consumer complaints and we wanted to know why they were sending out letters alerting people they needed to pay a debt  that didn't exist. The Executive Vice President, sent a couple of emails answering our questions.

The company released this statement:

"American Debt Mediators provides debt negotiation services to consumers who are financially unable to meet their credit obligations. We successfully negotiate significant discounts off of unsecured debt amounts owed by our clients. We have thousands of very satisfied clients who routinely let us know how much we help them improve their lives by lowering and/or eliminating their debt loads.

The Dallas BBB has a firm policy regarding all debt negotiation companies. All such companies start with an automatic "D" rating and, after 3 inquiries or complaints are lodged against the company, the rating becomes an irreversible "F." The Dallas BBB has informed me that because our business is based on helping consumers "get out of paying" the full amount otherwise owed to credit card companies, the BBB does not like the business premise. Hence, the policy of an automatic "D" rating quickly followed by an irreversible "F" rating. We have no control over the BBB's automatic and firm policies when it comes to our industry. Other companies they report on have an "A" rating even though they have way more consumer complaints than we do.

We make every attempt possible to resolve any and ALL complaints brought to our attention. We follow up with every customer matter we are aware of.

The letters we send out are just offers to people who may or may not want to use our services. For anyone who does not need or want our services, they may simply disregard and throw out our offer. We can also opt out anyone who does not want to receive future offers from us.  In fact as our offer says on the face of it, people may opt themselves out of receiving our offers by going to: www.mail-opt-out.org.  Our offers should not be frightening in any way. They are just direct mail offers for a service that may or may not be applicable to the recipient just like the hundreds of other offers people receive in the mail. But, again, anyone can opt out of receiving our offers and, thereby, eliminate the issue.

Someone may get an offer from us who no longer has debt because the information we were supplied with was (without our knowledge) outdated. For example, last week, I received a direct mail offer for medication for my dog who passed away 10 months ago. Obviously, the company that sent it to me did not know I no longer had a dog. So, I simply threw the offer out. The same situation would apply here."

Gallagher says no matter who the company is,  always do your research and be careful about the information you give up. "Before anybody can work with your information, they are going to need your information. They are going to need your credit card information, know what your account is, what your back up is, maybe your bank account or what your payroll information is," he says.

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