Legal Question in Credit and Debt Law in California
Cancelation of a debt settling agreement
We have contracted a debt settlement group that we found on line, in California, to settle some credit card debts. Regarding the cost, for their service, in the contract we signed, it was not the same information that was told us via phone conversation. In the fine print of the contract, we found additional costs, that they said we owed and were in arrears for, after we started the process. It amounted to over $2000 beyond the 25% of the balance of the settlement figure for each debt settled. When we found, later, that they had an ''F'' rating with the BBB of California,we cancelled the contract, only after two weeks from the original signing, and now are receiving notices that we owe the $2000. They were noted for scamming people just the way we were scammed. They have threatened us with there own legal threats, saying that this debt is owed to them and is in collections. We sent an appeal to them, but just received another notice that we need to remit the full $2000 amount. Do we owe that money, even though we have not recieved the full debt resolution help, we contracted them for? In the contract, it also states that we can't seek an attorney's help, but must settle it according to the arbitration law of California.
1 Answer from Attorneys
Re: Cancelation of a debt settling agreement
Sounds like a scam to me. You don't need a "debt negotiator" or any of those other worthless services. If you want a payment arrangement with your creditors, pick up the phone and do it yourself. It's easier and a lot less expensive. Why go into more debt just to resolve the debt you already have?
If the contract with the debt negotiator provides for mandatory arbitration in California, it is likely unenforceable. The various consumer protection statutes in California would likely invalidate such a provision.
The BBB has no jurisdictional authority. Don't waste time with the BBB.
You can likely tell the debt negotiators to drop the issue or that you will seek out an attorney to sue them for fraud, unfair business practices, and various forms of injunctive relief.
Good luck.
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