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Credit consolidation scam?

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G

gracee

Guest
On December 1, 1999 I entered into a contract agreement with a credit counseling program to consolidate my debt. My monthly payments were $967.00. Twenty dollars of that monthly payment was a service fee. So far I have sent them 13 payments =$12,571.00 minus $20 a month (-$260.00) equals $12,311.00......My debt has only been reduced by $3,910.93 Where did the other $8,400.07 go????? Is this right? What can I do? I have pasted a copy of the contract below. I also was under the impression that finance charges and late payments would be waved by my creditors while I was in the program, this has not been the case.
AM I JUST CALCULATING INCORRECTLY? IS THERE SOMETHING VERY WRONG HERE???

CONTRACT:
Receipt of this contract means that your current debt situation will be resolved and AMMEND(ACC) will handle all aspects of the consolidation from this point on once we receive the signed contract with payment. There are 2 pages for the contract. Please review the contract to verify that your information is correct. If there are any errors please contact your credit counselor.

YOUR SCHEDULED MONTHLY PAYMENT IS COMPUTED SO THAT IT IS THE LOWEST POSSIBLE PAYMENT YOU CAN MAKE TO ALL OF YOUR CREDITORS (Based upon each Creditor's individual guidelines) WE HIGHLY ENCOURAGE YOU TO INCREASE YOUR MONTHLY PAYMENTS IF POSSIBLE, TO HELP YOU GET OUT OF DEBT SOONER.

AMMEND(ACC) WILL AUTOMATICALLY APPLY INCREASED PAYMENTS TO THE ACCOUNTS THAT WILL BENEFIT YOU THE MOST. (we apply payment to the highest balance and/or the highest interest % account)

Please be sure to include your first full monthly payment along with the signed contract by your start date (date you chose to have your payment due) or send the $50.00 deposit with signed contract (deposit only applicable if determined by your counselor). Deposit will be applied towards your first payment (ex.-monthly Pmt.=$450, send $50 deposit with signed contract, then send remainder of $400 by start date, )

Applicants must sign and date the bottom of the page 1 and mail the contract back to AMMEND.

When this contract is received with payment, your counselor will contact you within 24 hours to confirm with you that it is in our office.

PLEASE SEND ONLY A MONEY ORDER OR CASHIER CHECK FOR YOUR MONTHLY PAYMENT OR DEPOSIT, PERSONAL CHECKS ARE NOT ACCEPTED!!!!
Please Remit Payments to:ACC POB 43482 Cincinnati, Ohio 45243

You will still receive statements from your Creditors, you can disregard them, but they will have your most Accurate Balance and most recent Payments for your own personal reference. Thank You!!

AMMEND (ACC) Credit Counseling Inc.
And Debt Consolidation

POB 43482
Cincinnati, Ohio 45243
(513) 271-1680 FAX: ( 513) 271-1681
Counselor: Scott Helterbridle
CONTRACT between AMMEND (ACC) Credit Counseling and Debt Consolidation and **(ME***) residing at *********

1. I,******* hereby appoint AMMEND Credit Counseling and Debt Consolidation (hereafter known as ACC) my true and lawful agent to develop, implement, and manage a financial program and to pay my funds to creditors as shown on the Creditor Listing Sheet on file with ACC.
2. I hereby agree to place in the hands of ACC the sum as specified below until sufficient funds have been paid to ACC to discharge my obligations to all of my creditors as set forth in the Creditor Listing Sheet, SPECIFICALLY ANY PREPAYMENT OR EARLY PAYOFF MUST BE EXECUTED BY ACC.
3. I hereby agree to cooperate with ACC by promptly making the periodic deposits as set forth below and do any and all reasonable things to effect the purpose and objectives of this agreement. ACC is not responsible for payments to creditors until ACC is provided with the complete address, account number, and if requested, a monthly statement of such creditors. It is also understood that the below scheduled payment includes a ten dollar min.or two dollar per creditor (whichever is greater)monthly postage and/or administrative expense contribution. It is also understood and agreed that nothing in this agreement shall be construed to require ACC to continue making payments to any of the undersigned's creditors after the undersigned has served a notice of cancellation or is in willful default under this agreement.
4. The undersigned may cancel said contract upon thirty (30) days written notice to ACC. Until the cancellation becomes effective, the undersigned shall continue to cooperate with ACC and make the prescribed payments, and ACC will continue to actively service the undersigned's account. "Actively service the undersigned's account" means that ACC will handle client and creditor communication for the undersigned.
5. Failure of the undersigned to reasonably cooperate with ACC or make the prescribed payments as set forth above, shall constitute a willful default by the undersigned. Upon such default, in addition to all other remedies, ACC shall be entitled to immediately cancel this agreement.
6. In the event this agreement shall be terminated for any reason, the undersigned agrees that ACC shall be entitled to apply any funds in its hands first to any advances made by ACC on behalf of the undersigned, then to any fees and/or cancellation charges that may be due and owing and then to take the balance, if any, and disburse these funds to one or more creditors of the undersigned at the sole discretion of ACC.
7. It is understood and agreed there is no fee charged to you for distributing money to creditors in this plan. The terms of your payments to ACC are as follows:
r
Starting contract balance: $42485.00 Date of contract: December 1, 1999
Initial deposit (only applicable if so determine by you and your counselor otherwise full sched. pmt. as shown below):
Additional payments of : $967.00 to be paid every 30 days thereafter, starting on: 12/15/1999 (CHANGED TO 12-21-99)
This contract expires when debt is paid in full or approx. months, (based on min. sched. pmt.)(increasing monthly pmts. will pay debt off sooner)(recommended if possible)

8. If by virtue of payment delinquency of the undersigned, the creditors shown on the Creditor Listing Sheet still remain unpaid at the date of expiration of this contract, the undersigned may enter into a new agreement with ACC covering the remaining amounts owed to the listed creditors.
9. In the event of prepayment of this contract, or of cancellation by the undersigned, or in the event of cancellation by ACC after willful default by the undersigned, any advances made by ACC shall be immediately due and payable by the undersigned to ACC.
10. It is clearly understood and agreed between the parties hereto that ACC will not assume any debts. The client understands that he or she shall fully discontinue use of debts listed on the Creditor Listing Sheet. In the event that any dispute or contest shall arise between the undersigned and any of the listed creditors, undersigned is advised to obtain such counsel as he may desire for representation in connection therewith. It is clearly understood and agreed between the parties hereto that ACC's relationship to the undersigned is simply as a financial consulting and management agency, and ACC shall not in anywise undertake to perform any legal services of an attorney.
11. ACC is not to be held liable for any garnishments, wage assignment, repossessions or laps of any insurance policies, nor will it assume or absorb deferment payments, extension payments or late charges. ACC is not to be held responsible for receipt of late notices or duns by the undersigned, nor adverse for the failure of any creditor to properly apply remittances made by ACC. Drafts sent creditors, but not lost drafts, may be requested no sooner than 15 days after mailing.
12. ACC will assess to the undersigned's account a twenty dollar charge for each deposit of and dishonored check received from the undersigned or by payment to ACC.
13. The undersigned understands that ACC will make payments only to the creditors referred to on this contract, and represents that full disclosure has been made to ACC of the amounts due to these creditors. If there has been any understatements of the amount due, ACC shall have the option to cancel this agreement immediately. Upon cancellation, it is understood that ACC shall be entitled to its prorate monthly payment up to the date of cancellation.
14. ACC shall not discharge any of the undersigned's debts in any manner other than in full satisfaction or after the agreed to distribution among the creditors of the undersigned.
15. This agreement represents the full and complete understanding of the undersigned and ACC and there have been no other warranties or representations made by ACC other than those specifically set forth and herein and any another document attached hereto and signed by the undersigned.
16. ACC reserves the right to pay no bill until the undersigned's check clears.
17. The acceptance of a credit counseling service may or may not affect your credit worthiness, depending upon the interpretation for the creditor.
18. IMPORTANT: If you fail to make the payments as agreed, ACC may be able to cancel payments to your creditors 30 days or more prior to your failing to make your payments as agreed. The money that ACC recovers from canceling outstanding payments made to your creditors will be applied to the payment of all advances and other charges that may be due to ACC. You may still owe your creditors for the payments that ACC cancels, as well as for all amounts that have not yet become due. I acknowledge receipt of an exact copy of this agreement.

X_____________________________________________________________ Date_________ X______________________________________________ Date_____________
Applicant Co-Applicant
PLEASE SIGN AND RETURN THIS CONTRACT. THIS CONTRACT IS NOT VALID UNLESS ACCEPTED BY ACC CREDIT COUNSELING.

by_________________________________________________________________at ACC CREDIT COUNSELING



Creditor Listing Sheet:


1. SEARS-- $ 2613.00
2. CAPITAL ONE-- $ 8341.00
3. FIRST CARD-- $ 4998.00
4. DISCOVER-- $ 6349.00
5. SEARS MC-- $ 5207.00
6. FLEET BANK-- $ 5997.00
7. BANK OF AMERICA-- $ 3162.00
8. PROVIDIAN-- $ 3373.00
9. RETAILERS NB-- $ 502.00
10. RETAILERS NB-- $ 1943.00
11. - $ 0.00
12. - $ 0.00
13. - $ 0.00
14. - $ 0.00
15. - $ 0.00
16. - $ 0.00
17. - $ 0.00
18. - $ 0.00
19. - $ 0.00
20. - $ 0.00

PLEASE NOTE: Deposits and Payments MUST BE in the form of a Cashier Check or Money Order, or we will be unable to process your request.

When completed please remit this to ACC immediately…………..

FOR IMMEDIATE RESPONSE PLEASE FAX THIS AGREEMENT TO THE FAX # BELOW
(if you FAX your contract, you must mail an original copy also!)

ACC
POB 43482
Cincinnati, Ohio 45243 FAX# (513) 271-1681





 


J

joseph17

Guest
Although I am not an attorney, I have made some observations, which may (or may not) be helpful.

1. Scanning over the contract, I failed to see anywhere that states that the interest will be reduced or eliminated.

2. Also, I don't see any ending date, which could easily be calculated, if there was no interest being charged.

3. I have the feeling that they have consolidated your debts, and made agreements with the creditors to accept the payments, thus simplifying your life in this regard, but your total debt is only being reduced very slowly, because interest may still be accruing.

4.I'm assuming you can call one or more of your creditors, and find out exactly what the arrangement has been agreed to, and whether or not interest has been reduced, eliminated or increased!

5. If you haven't already done so, it appears that you could use some good legal advice (that's why you're here!), and contact a reputable attorney specializing in consumer debts.

Good luck in the final resolution of this matter.
 

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