Fidelity Debt Solutions, AKA Aaron Mortgage Group Inc., has been in business since March 2004 and is a debt settlement company. The BBB currently reports them with a D rating and shows 5 complaints files with the BBB as of the time of this review. For those who have read any of our other reviews on companies in this industry, you know that we don’t put too much weight in the BBB’s rating system, but rather use the BBB as an additional indicator on how a company is doing.

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.