I became involved with National Choice Debt Settlement Group in January 2009. I initially came into contact with this company after looking at their website and supplying my contact information. A representative Ron Sequeira -- soon called me and assured me that this "debt reduction company" was better than any of the others, because they kept my money in an escrow account the entire time, and only took out a "small fee" for each monthly payment. What he told me was a complete lie.
He said that it took "an average of six months" for most credit card companies and banks to settle with the company, so to simply stop paying my creditors and ignore any bills I received from them in the meantime, and send them along to the company. He promised that my creditors would stop sending me bills and threatening letters and calling me if I did this, but that never happened.
Over the course of the next six months, the company applied the entirety of my monthly payments to fees, and did not pay a single cent into the "escrow account" they had suppsedly created for me and were supposed to be depositing my payments into -- minus their "small fee" -- in order to pay my creditors once enough money had accumulated in the account, after they (supposedly) negotiated lower settlements for me.
When I told the company representative that I was still being harassed daily by creditors, he assured me that this was a "good sign" because it meant the companies were getting "desperate" and would settle soon, even though he had promised before that they would not contact me anymore at all. He even said it would be a good sign if the companies threatened to sue me, because they were only bluffing and that meant they would settle if I ignored them!
The entire time, I had thought that my debts were being paid down and that my credit was slowly being rebuilt, but instead the opposite happened: the amount of my debts only increased through interest and fees, and my credit rating was completely ruined.
I enrolled in a debt reduction company to begin with because I was completely broke and could not afford the upfront fee to file for bankruptcy. I was applying for Social Security Disability after becoming unable to work fulltime starting in June 2008 due to depression, anxiety, and Asperger Syndrome, a form of autism. I did not understand exactly what I was signing both because of my disabilities and because the paperwork was extremely misleading -- when I filled out the forms to become involved with this company, relying on what the representative told me on the phone, i.e. that only a "small fee" would be taken out each month.
I did not understand nor did they say -- that they meant they would be taking 12% of the entire worth of my debt in fees, and that this was ALL my monthly payments would be going to for the entire first six months of the program. Obviously, if I had known they were going to take all of my money every month for the first six months, I would have chosen a different debt reduction company, or might as well have chosen none at all! The paperwork stated that the money would be held in a trust account, that it was "my" money, and that I controlled it. This was a flat-out lie.
I could not afford my monthly payment in March 2009 and had to borrow $250 from my sister and brother-in-law, who I had been forced to stay with because of economic circumstances since January. Since I could only work part-time because of my disabilities, I also was not able to make my payments for July or August 2009. Finally, I realized I would not be able to make any more payments, and asked the company representative to give me back all of the money I had paid into the program thus far, that (I thought) was being held in an escrow account for me, so I could try to save up money to file for bankruptcy.
The representative informed me that I would only be receiving back $444 of the money I had paid into my account about $1160 by this time. I asked why, and that is when he finally explained that the entirety of the first six months payments were applied to fees, not a "small amount," like he said before. I closed the account and was sent a refund check in the mail for $263!
I talked to a bankruptcy lawyer, and he said he would be able to get the rest of the money back for me. He wrote to the company, demanding they return the money that was supposed to be being held in an escrow account for me. They did not respond by letter, and on the telephone the representative said he could only talk to my bankruptcy lawyer if I was present in person -- as well. I live in Massachusetts, and the company is based in Orange County, California. My bankruptcy lawyer then informed me that he talked to other attorneys who had been involved with "debt reduction companies," and they told him it would be very difficult to get me my money back, since they were too far away to sue, or obviously for both of us to even talk to them in person.
I was, at the time, living as a transient, sleeping on my sister and brother-in-laws floor, and only able to (just barely) work part-time because of my disabilities, just barely getting by day to day, while I applied for Social Security and Section 8 housing. I was counting on the refund check from my escrow account to file for bankruptcy, to move into my own place, and to pay back the money I owed to relatives, but could not now because of this companys crooked policies. I had started the program with the assurance that I would be able to both save my credit rating and settle my debts for more affordable amounts, so I could start fresh. Instead, all of my creditors handed my accounts over to collection agencies, and I ended up worrying about being sued and not being able to do anything about it.
I also -- because I have been on disability and have lived on a fixed income since May 2010 -- was never able to re-establish my credit, and thus qualify for a better-paying job, a new car I have been sorely in need of for over a year, or anything else that requires a credit check, which is pretty much everything these days.
I just do not think its right that a company can prey on the poor and desperate, as they did with me, and take money from them that they dont have and desperately need, ruining their credit and making their entire situation even worse in the process, under the guise of "helping" them.