- Report: #423917
Report - Rebuttal - Arbitrate
Complaint Review: Topaz Financial Services
Topaz Financial ServicesNorthwest Center 7550 IH 10 West, Suite 100 San Antonio , Texas 78229 San Antonio,Houston, Austin, Texas U.S.A.
Topaz Financial Services, Swift Rock, Mesa Rock Rip Off, treats employees like numbers, RUN! San Antonio,Houston, Austin Texas
*UPDATE Employee: Please contact me if you have a complaint
*UPDATE EX-employee responds: Derrin Scott, The owner of Topaz Financial Services, Mesa Rock, and Swift Rock cheats his employees and is a wolf in sheeps clothings
*UPDATE Employee: Topaz Financial Services charges excessives fees and cheats employees
*UPDATE EX-employee responds: Buyer Beware of Topaz Financial Services, Swift Rock Financial Services, and Mesa Rock Financial
*UPDATE EX-employee responds: Topaz, Swift Rock, Mesa Rock, CY Debt (all the same company!)....all looney...stay away!
*Consumer Comment: RE:
*Author of original report: Topaz Financial Services!
*UPDATE Employee: Nice try Abby........
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Than Hiring a Settlement Company Topaz Financial Services
If you are leaning toward debt settlement as your preferred strategy, the next decision is whether to use the do-it-yourself approach or hire a third-party professional settlement company to handle the negotiations for you. In this two-part article, I'll discuss some important reasons why the do-it-yourself approach makes a lot more sense for most consumers than using a third-party settlement company.
The first big reason why DIY debt settlement is better than using a third-party company is the FEES involved. With a professional company, you can expect to pay steep fees under one of two pricing systems that are used in the industry. In the following paragraphs, I will describe these two systems and give an example of how the fees would work under each system.
Contingency Fee Structure
1. Administrative fee (3% to 6% of debt enrolled)
2. Monthly service fee ($30 to $80 per month)
3. Negotiation fee (25% of savings on each account settled)
Example 1: You have $30,000 of debt. You hire a settlement company that charges 4% of the debt as an administrative fee, plus $40 per month, plus 25% of whatever they save you in the negotiation. You agree to a monthly payment into the program of $600. Assume the company manages to settle all your debts for an average of 40 cents on the dollar. At $600 per month, it will take 32 months to complete the program. Your total payout to the creditors will be $12,000. Your three different fees will add up to $6,980 ($1,200 administrative, $1,280 in monthly fees, plus $4,500 in negotiation fees). So your total payout will be $18,980 ($12,000 to the creditors, plus $6,980 in fees).
Front-Loaded Fee Structure
1. Flat percentage of enrolled debt (12% to 16%)
2. Fee paid over 10 to 18-month period
3. Monthly service fee ($30 to $80 per month)
Example 2:You have $30,000 of debt. You hire a settlement company that charges 15% of the debt on the flat fee method, plus $40 per month. You agree to a monthly payment into the program of $600. Assume the company manages to settle all your debts for an average of 40 cents on the dollar. At $600 per month, it will take 30 months to complete the program. Your total payout to the creditors will be $12,000. Your three different fees will add up to $5,700 ($4,500 flat fee, plus $1,200 in monthly fees). So your total payout will be $17,700 ($12,000 to the creditors, plus $5,700 in fees).
To be sure, the above examples over-simplify the whole process, mainly because the debt level will not remain static at $30,000, but will inflate with interest and fees for at least the first six months (assuming you were current or near-current at the time of enrollment).
At first glance, the fee structure in Example 2 might look better, because the total fees are $1,280 less than the fees in Example 1 for the same amount of debt. However, there are two very serious problems with this second fee structure.
First, with the negotiation fees set at a flat 15% of the enrolled debt, the settlement company makes exactly the same amount on your case if they obtain 50% settlements as they do if they obtain 25% settlements across the board. Either way, in our Example 2, they collect $5,700 in fees. So where is the incentive to grind it out with the creditors to get you the lower percentage deals? At least with the contingency-based fee structure, the company makes a percentage of what they save you, so they have a built-in incentive to obtain lower settlements.
Second, under the Example 2 fee structure, the fees are "front-loaded," meaning they are collected during the first 10-18 months of a 30 month (or longer) program. So during the first year or more, most of the money you are paying into the program is absorbed by fees, and very little is left over to actually pay settlements. If you do decide to use a third-party professional settlement company, use one that charges a percentage of the savings, with low administrative and monthly fees. That way, more of your money will go toward settling your accounts rather than paying fees.
With the DO-IT-YOURSELF approach, there are no administrative fees, monthly fees, and negotiation fees (either front-loaded or based on percentage of savings) to worry about. So even if you don't do quite so well as a professional firm at getting low percentage settlements, you'll still save a pile of money in fees. And there is more than money to be saved. There is also TIME to be saved by getting out of debt much faster on your own. Using the first example above, with $6,980 in fees, at $600 per month funding level, that means an EXTRA YEAR IN THE PROGRAM!
Conclusion: You'll get out of debt FASTER by doing it yourself, and you'll save $1,000s in the process.
LOSS of FLEXIBILITY
One of the most attractive features of the debt settlement approach is its tremendous flexibility. Under virtually every other type of debt relief program, you are required to make a fixed monthly payment into the program. This is true of debt consolidation, credit counseling, and Chapter 13 Bankruptcy. In the past, it was NOT true of debt settlement. In other words, let's say you've agreed to $600 per month into the program as your monthly goal or "target" payment, with the aim of settling $30,000 of debt in less than 3 years. In prior years, it used to be possible for you to call the settlement company and say, "Look, the car needs new tires. I'm going to need to skip my payment this month." The result was simply adding a month to the program, and this flexibility was very important to people. In fact, it was often quoted by customers as the number one thing they liked about debt settlement.
Nowadays, however, the third-party settlement companies have moved more and more toward fixed monthly payment requirements. Why? Because that is how the fees are collected! If you are not making a monthly payment, then they cannot automatically deduct their fee. This is even more so under the "front-loaded" fee structure discussed above, but it also exists under the first example, because that's how the monthly fees and negotiation fees are collected. So what started out as a way to provide increased flexibility and give consumers more options and more control has evolved into a more restrictive program with less flexibility. To be fair, some settlement companies will still allow occasional missed payments, but if it happens too frequently, you will be dropped from the program.
With DIY debt negotiation and settlement, the original concept of total flexibility is restored. Since you are in the driver's seat, you are completely in control over your monthly funding level. You control the cash, and no one can cancel you if you need to skip a payment here or there!
Conclusion: The DIY approach to debt settlement restores the all-important flexibility that struggling debtors need in order to get back on their feet financially.
In the second part of this article, we'll look at some additional reasons why doing it yourself is safer than using a third-party debt company to settle your debts.
San Antonio, Texas
This report was posted on Ripoff Report on 02/13/2009 05:22 PM and is a permanent record located here: http://www.ripoffreport.com/r/Topaz-Financial-Services/San-AntonioHouston-Austin-Texas-78240/Topaz-Financial-Services-Swift-Rock-Mesa-Rock-Rip-Off-treats-employees-like-numbers-RU-423917. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.
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