Monday, January 31, 2011

Scams of the Week: Jan 31, 2011

Medical Billing From Home - A couple years ago NHCD, a business with roots in the KC area, was busted for stealing millions of dollars from seniors.  They would recruit an incredible number of people to bill their clients from home. We received countless calls asking about whether it was ok to work for the company or not, which is not something the BBB keeps track of.  One thing we did tell people is that it's not as easy to make money billing from home as the business makes it seem.  They are selling an idea.  Of course it sounds great. It just might not be the financial salvation they make it out to be.  There is much needed training that the companies skim over, employees often must purchase expensive software and sometimes install long distance, toll-free phone numbers in their homes. The biggest problem is no longer from businesses that "recruit" home-based billing personnel.  It comes from salesmen who put on seminars aimed at convincing people they can create a one-person-home-based-billing-business and then charge thousands for "training" that involves a few phone calls with someone who reads from a script.  As soon as a medical company or "traveling seminar" makes the job sound like a breeze, they're scamming you.

National Credit Solutions - Yet another collection agency that has repeatedly violated the Fair Debt Collection Practices Act (FDCPA).  Problems began occurring with the company when they began collecting debts on behalf of bankrupt Hollywood Video. Their BBB Business Review mentions they are currently under investigation by more than one Attorney General and the Montana Attorney General has filed suit against them for violations of consumer protection laws.  It seems that they might be collecting real debts, but they are charging debtors fees to collect those debts.  They are also not validating debts as they are supposed to according to the FDCPA and using inappropriate threats to collect debts.  They are telling debtors how much their credit score will drop if they are not paid, but collection agencies do not have any influence on the calculation of credit scores.  Because of the countless problems this company seems to generate, if you are contacted about a debt with them, IMMEDIATELY write them a letter expressing your wish that they provide proof of a valid debt. If they do not provide it, they will have found another way to violate the FDCPA.

CMG Group/OSM Group/SSM Group - Unlicensed Payday Loan companies.  I don't know why they like using Kansas City addresses or employing Kansas City residents to do their dirty work, but they're not even really here. They're in the Federation of Nevis/St. Kitts.  They frequently claim to have no affiliation with each other, but they're on the same street in the same country. Sure...they're not related.  These companies install a $200 payday loan into the borrower's account and say that the client will have to pay it off in six or eight weekly installments of $75 (i.e. 225-300% interest).  It's a bad deal to begin with, but the good news doesn't stop there.  They will keep charging $75 a week or bi-weekly until the client is forced to close his or her account.  These companies often charge thousands of dollars for their $200 loan.  They are never licensed to lend in any state. They set up a website and wait for people to find them.  Once they cause enough trouble under one name, they just rename it, hence all the nonsensical initials that don't stand for anything. If you have been contacted by one of these companies or another like it, contact your state Banking Commission.

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