NationwideDebtSolutions.com has been in the Credit and Debt  industry since 1998 and it is evident when you talk to their debt consultants that they are very experienced and knowledgeable in the field. What we found to be extremely pleasing about their approach is that they really listen to their clients and thoroughly cover the pros and cons of the debt management options available. They are very patient and seem to be more focused on finding the right solution, instead of just quickly enrolling anyone.

Another important factor when choosing any debt program is knowing what percentage of your total debt is being collected into escrow for direct use in making settlements. Our research shows that companies are all over the map on this one; ranging from 25% to 50%. The debt settlement program offered by NationwideDebtSolutions.com collects a full 50% into settlement escrow which allows for a worst-case scenario. This is very good, because a huge number of complaints about other companies are regarding not having enough funds in escrow to adequately settle all accounts. An important note is that many companies collect a lower amount for settlement to entice clients in with a lower monthly program payment. In our opinion, companies that do that are simply setting clients up to fail. Since NationwideDebtSolutions.com collects a full 50% into settlement, you are effectively building funds for settlement faster and are in a better position for success in the program.

The time they take with each client with an initial consultation really pays off when their client’s tend to be dedicated to staying in the program for a successful completion. They also explain to every client why this industry tends to have a lot of complaints, and that the reason they don’t, is simply because they prepare every client with what they need to know to effectively handle creditor calls and communicate regularly with a dedicated customer service staff.

Each client is also provided with online account access to closely monitor their progress in the program, as well as get up to date information and support tools such as educational videos and a monthly newsletter. The fees they charge are well within the standards for the industry as outlined by TASC and USOBA.

Visit their website

The BBB currently reports an F rating with 16 complaints, but the important thing to note here is that Consumer Law Associates is not a paying member of the BBB. As we have noted in many of our reviews, there is obvious preferential treatment for BBB members (see review on Care Once Credit where they have over 170 complaints with an A rating). What most people are unaware of is that the BBB has a policy in most states to rate all “non-member” debt settlement companies with a “D-” rating right out of the gate. From there, they subtract more points for complaints. Since the BBB has no way to know how many clients a particular company has, they make a company look bad with even as little as a few complaints.

Now ask yourself this question, “Which of the below companies would you rather work with?”:

- A company that has over 2,000 active clients and 16 complaints

- A company with 300 active clients and 7 complaints

According to the BBB the company with 16 complaints has an F rating, and the one with 7 complaints is rated B. The company with 16 complaints is Consumer Law Associates and the real story is that the BBB ratings are not worth anything and can easily steer a consumer away from a good company. 16 complaints out of 2,000 clients is less than a 1% complaint ratio and is a great record by any standard. Especially given that the debt settlement industry tends to have a lot of complaints since it deals directly with consumers in high-stress situations. The real value of seeing complaint listed with the BBB is to see how the company is handling them. If you see a large number of unhandled complaints, or complaints that were not responded to for a long period of time, that would be of concern. As you can see on CLA’s BBB report, they make a practice of promptly dealing with all complaints.

Furthermore, in reading through not only the complaints on the BBB, but also the ones listed on the Internet and with ripoffreport.com, the majority of the complaints are due to the clients not understanding the program in which they were enrolled. This means that they most likely were not listening, did not read the contract, or were misled by a debt consultant. If they were misled by a debt consultant this is to no fault of CLA since most of their clients are sent to them from other provider companies. In addition, many of the complaints aimed at CLA were actually complaints against a few of the larger debt settlement companies that refer clients to CLA and have nothing to do with the CLA law firm.

In contacting some of our contacts with TASC and USOBA (two industry organizations that lobby for the debt settlement industry), the reputation of CLA is quite remarkable and they are quickly becoming one of the pillars in the industry. Also because they are a law firm, consumers have some additional protections in place since attorneys and law firms are heavily governed by the BAR Associations.

Our conclusion is quite simply that Consumer Law Associates (CLA) offers a very solid debt settlement program and we have seen no evidence that justifies the poor rating assigned by the Better Business Bureau. I would feel badly for a consumer who decides against working with CLA based solely on their unfair BBB rating and a handful of misdirected complaints. They are certainly among the Top 10 debt settlement companies.

In researching this company, it was very clear that there are a lot of problems with the consumer credit counseling model and this program has a very low retention rate overall. That being said, Cambridge seems to have a very low consumer complaint record in comparison to other similar companies in the industry. They also seem to provide more educational services and materials to clients than other credit counseling companies.

At the time of this review, they have a “C” rating with the BBB and only 4 filed complaints in the last 36 months; all of which have been either resolved, or closed. Without knowing for sure how many clients they have, this seems to be a low number of complaints. A search of Google brought up quite a few more complaints, but they really seem to stem from the consumer credit counseling model being flawed rather than any wrongdoing by the company. The largest number of complaints seem to be that creditors do not honor the proposals and revert back to full required payments after a short time in the program.

In our research on this company we found a large amount of information about the credit counseling industry as a whole. Most of this research points to this strategy as being ineffective in getting consumers out of debt; and in fact, may put them further in the hole.

Here is an excerpt from consumerfed.org:

Major Problems With Credit Counseling

Not all of the new credit counseling agencies are a threat to consumers. Some are above-board and have pioneered consumer-friendly practices, such as flexible hours, electronic payments and easy access by phone and by Internet. However, as the new generation of credit counseling agencies has gained market share, consumer complaints have risen sharply. The Better Business Bureau reported in 2002 that complaints about credit counseling agencies nationwide had increased to 1,480, up from 261 in 1998. Three types of problems are adversely affecting consumers:

• Deceptive and Misleading Practices. Complaints and government investigations have focused on agencies that do not make consumers’ payments on time, that deceptively claim that fees are voluntary, and that do not adequately disclose fees to potential clients. The last two charges are among those cited by the State of Illinois in its lawsuit against AmeriDebt. Inc.

• Excessive Costs. In an industry that rarely charged for counseling and other services a decade ago, most agencies now charge fees to set up a Debt Management Program (a debt consolidation plan known as a “DMP”) and to maintain it on a monthly basis. Some agencies charge as much as a full month’s consolidated payment-usually hundreds of dollars-simply to establish an account.

• Abuse of Non-Profit Status. Some “non-profit” credit counseling agencies are increasingly performing like profit-making enterprises. Nearly every agency in the industry has non-profit, tax-exempt status. Nevertheless, some of these agencies function as virtual for-profit businesses, aggressively advertising and selling DMPs and a range of related services, maintaining close ties to for-profit firms, reaping high revenues and paying their executives salaries that are much higher than average for the non-profit sector. A survey of Internal Revenue Service (IRS) tax reports on non-profit organizations found numerous examples of lavish executive compensation and apparent windfall revenues. For example, American Consumer Credit Counseling reported paying its president in 2000 a salary of $462,350 plus just over $130,000 in benefits. In that same year, Cambridge Credit Counseling reported a net financial gain of about $7.3 million. In short, some agencies may be in violation of IRS rules governing eligibility for tax-exempt status. Credit counseling organizations should not qualify as non-profit corporations under IRS rules if they are organized or operated to benefit individuals associated with the corporation or if they are not operated exclusively to accomplish charitable or educational purposes.

Although American Consumer Credit Counseling has an A rating with the BBB, they have more complaints than similar companies that have a D rating. This further points to the BBB as a very bad source for true ratings on any company. Further search of the internet turned up numerous complaints about American Consumer Credit Counseling. Most of these complaints centered around the company making payments late on behalf of clients, and creditors not honoring agreements with credit counseling.

In summary, as we do more and more research on credit counseling companies, we are finding evidence that it is no longer an effective program for anyone. Our recommendation is that if you cannot continue to make your minimum payments after tightening your family budget, your best option is a Debt Settlement Program.

A search of the Internet as a whole brings up a rather large number of additional complaints about Care One Credit’s credit counseling program. As mentioned with other credit counseling companies we have reviewed, many of the complaints are more about the ineffectiveness of credit counseling as a whole, rather than any wrongdoing by the company. For example, there are an increasingly large number of complaints about credit card companies cancelling the agreements through credit counseling because the monthly payments made by the credit counseling company on behalf of the clients were received after the due date.

A large portion of the complaints we found were from client’s who claimed that they had been in Care One’s program for several years, and made all their payments on time, but have seen their credit card balances continue to increase. To be fair, we must also mention that we see this trend in complaints about the other consumer credit counseling companies we have reviewed as well.

A review of Care One Credit’s website shows that they provide a great deal of consumer education information that is very valuable for their clients as well as the general public. However, we recommend to exercise caution before enrolling in any consumer credit counseling program simply because it has a very low success rate and is not appropriate for a large number of those who enroll. If you cannot make your minimum payments, you may be better served with a debt consolidation and settlement program, or perhaps even bankruptcy rather than paying the fees of consumer credit counseling and not actually making any headway.

When we requested information at their website, it was nearly 2-days later before we received a return call. The individual that called us was not very professional and seemed to be working out of their home (I could hear a TV in the background). There was not much of a consultation. The debt consultant started right in by telling me that their program was the best way to go and that other companies are simply a scam. This was all before he even knew anything about my situation.

They have a large amount of positive testimonials on their website, but given their record, one has to wonder. I do know that they do a large amount of advertising on the Internet and can only assume that they have a large number of clients, so that does have to be considered when analyzing complaint numbers.

A search for complaints against ABC Debt Relief across the Internet revealed more complaints. The largest concentration of complaints seemed to be consumers who did not understand that their creditors were not going to get paid monthly and that debt settlement takes time. This type of complaint seem to be very common in this industry. Without knowing exactly how many clients ABC Debt Relief has it is hard to accurately asses the severity of large numbers of complaints.

In a typical debt settlement program, the majority of accounts are not settled until after the 2nd year of the program. This is simply due to the fact that accounts are not aged and delinquent enough for settlement until well into the program, but also the client does not have sufficient funds saved to settlement escrow until that time. Since this company has only been in business since 6/2007, you have to consider that they may not actually have many or any clients who have completed their program at this time.

A search of the major consumer reporting websites and the Internet as a whole turned up many complaints about Fidelity Debt Solutions (FDS). Without knowing exactly how many clients they actually service, it is hard to tell if the large number of complaints is large in comparison to the number of clients, but the amount of complaints and type of complaints are concerning. After reading through many of the complaints, there is indication that the company may not be fully disclosing how the process of debt settlement works. They may be “glossing over” the cons of this type of program, and effectively enrolling people who are not in enough of a hardship to warrant a debt settlement strategy. Often we see this when enrollment staff is paid mostly on a commission basis and/or enrollments are done by independent affiliates working off-site. I did not see a significant amount of complaints that actually amount to the company not doing what they are supposed to in a debt settlement program.

After reviewing Fidelity Debt Solutions’ website and informational content, we found some of it to “sugar-coat” the debt settlement process. For example, in their “how it works” section that state that as soon as you enroll in their program, all your creditors will be contacted and told that they are representing you. This is a very misleading statement and indicates that they are going to handle your creditors from this point forward. They may send a letter, but it will have no effect. What consumers should be told is how to handle the creditor calls and that they will continue. There is really no sense in a creditor contacting a debt settlement company until the client has been making payments into their settlement savings trust account long enough for there to be some money to work out a settlement arrangement. This kind of misleading information may be part of the reason they have so many complaints. Several complaints also stated that Fidelity Debt Solutions instructed them to stop making their payments to their credit cards even though they could have stayed current on their accounts. This sounds like a company much more concerned about getting a client enrolled, than determining a client’s situation and finding the best solution for them.

The other area of concern I see with their program is in their settlement program calculations. The calculator on their site shows that if you have $25,000 in credit card debt, they can get you out of debt for a 36 month payment of $375 (or $13,500). This is only 54% of what you currently owe. What this means is that after paying their fees (14% reported in several of the complaints we read), there is only 40% put into escrow for actually settling the clients accounts. This is simply not enough to reasonably settle all account in a timely manner; especially considering that all the accounts will continue to accrue interest, late fees, penalties while they are not being paid. To be safe, debt settlement companies should be making sure that at least 45% as a minimum is being put aside for settlement; 50% is even better. In my experience, when there is not enough money going toward settlement, it puts the client at additional risk of lawsuits and asking for additional funds later in the program puts a client into further undue hardship.

Consumers need to fully understand the process of debt settlement, and should be able to rely on their debt counselor to explain it properly. It is not a program for everyone, and is only recommended for those who are not able to stay current. Companies that do not take the “counseling” part seriously do themselves and the industry a great disservice.

Our internet-wide search for information on Hermosa Group turned up quite a bit of chatter from clients who seem to tell a similar story about signing up with them after seeing an ad on TV, only to find that they were then contacted by some other company or law firm that would be handling their case. There also seemed to be quite a few reports of clients not being able to get a hold of anyone after paying initial fees.

Since Hermosa Group is not actually a debt settlement company, we will not be assigning a rating. Our recommendation is to be careful about resonding to ads, especially those on TV. About 80% of the ads you see are simply lead generation companies that will take your information and sell it to as many as 2-10 different companies.

Here are a couple of the comments we found about Hermosa Group:

Be very careful about Hermosa Group. The things they say they can do for you and the law firm you are handed off to for your debt consolidation are not one and the same thing. The ‘Hermosa Group’ I dealt with is supposedly located in Colorado, and they put me in touch with the Palmer Law firm in Rancho Cucamonga, Ca. They do not disclose you will need to pay Palmer xx amount of dollars before they will even being negotiations with your creditors, and this in turn will result in negative credit reporting, and you being summoned into court. The Law firm will also not assist you in providing any legal advice unless you pay a fee direct to one the the lawyers they have retained in your state. These people have $2000 of my money, I just received a summons, and their attorney in my area wants an additional $1000 to represent me in court, with no settlement or relief in site. You need to check carefully before retaining this company, as they are now advertised on TV.

When you see a Hermosa Group commercial you think they are the end users, but look closer. They sell your information to anyone who will buy it (Are they attornies- guess you should ask em). The highest bidder will do. You dial their number, they route you to the buyer of your call. Hermosa Group is just an ad.