January 20th, 2010 by Kenneth Long
Hess Kennedy served as a reminder that debt settlement companies hold very large amounts of their customers’ cash. It also showed us that sometimes that cash is siphoned off or spent by company executives rather than being used for promised settlements. In the end, customers received only a 25% refund of their deposits after a court appointed receiver shut down the company.
Refund checks began going out December 30, 2009 and most customers whose claims were approved received their refunds by the second week of January. Refunds were far less than what people were hoping for.
It is a real shame that these families were victimized in their time of need by a company that misrepresented its capabilities. These families were promised savings of well over 50% on their debt. Instead, they lost 75% or more of their deposits due to fraud.
From a consumer protection perspective, I really feel for these families. I know that they have been robbed in the worst way, and that many of these families will not be able to recover from this financial blow anytime soon.
One difficult part is watching customers believe the outrageous claims made by Hess Kennedy and other debt settlement companies. The claims they make are often in violation of several state and federal laws.
However, the most difficult part of this entire situation is knowing that these families could have avoided the loss if they had simply checked the reputation of Hess Kennedy before signing a contract. If they had, they would notice that Hess Kennedy had an “F” rating with the Better Business Bureau.
I can promise you that if you choose to do business with a firm that has an “F” BBB rating, you are playing with fire. It is the government’s job to protect you from rogue companies, and they reacted by shutting down the Hess Kennedy and issuing refunds. However, tens of thousands of customers were still victimized. It is your responsibility to protect yourself, because government protections are not enough.
Therefore, please let the pain of these victims serve as a reminder to verify the claims of any company prior to doing business with them. For one, making sure the company is a bona fide charity is one helpful step. Most importantly though, see what their rating is with the Better Business Bureau. I personally shy away from any company with less than an “A-” rating.
This entry was posted on Wednesday, January 20th, 2010 at 1:33 pm and is filed under Consumer Protection, Debt Settlement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.