Better Business Bureau: Debt settlement loopholes

Nov. 12, 2011 at 5:12 a.m.

By Alan Bligh

More than 60 domain names have been registered in the name of Santa Claus, offering children a wide range of opportunities to email St. Nick. Sadly, some of the websites aren't always so trustworthy and can potentially be a dangerous way to share personal information. Writing to Santa has been a long-lasting tradition, and while it seems innocent, it is very important for adults to carefully review the site to determine who is seeking the information, how it will be used and whether it will be shared with third parties. Limit the personal information children share with Santa and omit physical addresses. There really shouldn't be a need to share this information. Especially since Santa already knows where all the children live.

Not surprisingly, debt settlement companies are switching tactics to skirt new consumer protection rules. The debt settlement business has boomed in recent years. The number of debt settlement firms has grown to about 1,000. There were only 100 in 2007. As the industry grew, so did the complaints. Consumers said some firms charged thousands of dollars in upfront fees and never delivered any debt relief. Hoping to stop rip-offs, the Federal Trade Commission last year barred debt settlement companies that use telemarketing from accepting upfront fees. Some companies soon found a loophole, though. It remains unclear whether the FTC rule applies to legal fees, so debt settlement firms are affiliating with lawyers to charge initial fees as high as $7,000 or more.

One of the most common complaints we see at holiday time is non-delivery of items ordered. Often companies have flat lied about their ability to deliver items on time. Other times, they just don't know or there is a problem with a supplier. If the seller is unable to ship the products you ordered within the promised time period, the law requires the seller to notify you of your right to cancel the order. The company must provide you a way to cancel your order or inform the seller, at its expense, that you still want the product. If a time frame is not given in a promotion, it is assumed to be 30 days. Make sure you keep all receipts and copies of ads. Also, check companies out at to see if we have had a problem in the past.

Yes, you cannot miss the ads. They are back. Toys R Us, Walmart and many others are heavy into layaway promotions. Layaways let shoppers put an item on long-term hold and pay in installments. Stores that offer layaway typically allow merchandise to be held up to three months. Minimum purchase amounts vary. The service fee at most stores runs $5, but there are restrictions and exclusions everywhere, and they are not consistent from store to store. Understanding cancellation fees is critical. What happens if you change your mind? For people who are not over-spenders, layaway makes a lot of sense because it helps them budget and plan ahead. Also, the fees are usually less than interest on charges you would pay for buying on credit. And . you do not have that post-Christmas stress that comes with all of those bills.

Alan Bligh is the executive director of the Better Business Bureau in Corpus Christi. Contact him by email at



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