As many consumers are busting their hump to get out of credit card debt, there are still companies out there who are 1_gavelhappy to take advantage of an unfortunate situation. Two so-called debt settlement firms are under the microscope for alleged deceptive practices in the state of Illinois.

Aliso Viejo, CA’s SDS West Corporation and Addison, TX’s Debt Relief USA, Inc. are under fire for using deceptive marketing practices, charging clients outrageous fees, and essentially doing nothing to help consumers financial situations or debt problems. SDS West has advertised their services to included assist with debt negotiations. However, another company, Nationwide Support Services are actually the ones handling the negotiations but clients have no knowledge of this fact. The company advertises that their services are much better than credit counseling agencies and promise to contact every debt to a substantially reduced sum. Enrolling in the program with SDS West, consumer are told to stop making payments to the credit card companies and instead make payments to the Nationwide Support Services account to use for negotiations. Consumers do not know that a large portion of this money will be paid toward the high fees, usually 15% of the total credit card debt. There is an additional monthly maintenance fee of $50 to use the service. This means for consumers that their monthly payments will take months before any of it will actually go towards the credit card debt. The major issue lies in the fact that consumers did not know these things.

Debt Relief USA is alleged to have promised that consumer credit card debt would be reduced by 40 to 60 percent, allowing consumers to be debt-free in less than 3 years. However, Debt Relief USA essentially did not live up to that promise on most customer accounts, causing consumers to leave the program before debts were negotiated and after high fees were paid for the service. Much like the issues with SDS West, Debt Relief USA also charged even more fees upon successful negotiation of the debt amount.

In both cases, deceptive practices further hurt consumers credit scores and their financial situation by failing to negotiate debt and charging excessive fees. Practices like this are getting more common among debt settlement companies who are in the business to get some cash for nothing. Experts recommend that consumers carefully review reports on the Better Business Bureau and research any debt settlement companies before signing on as a client. Some recommend that consumers use credit counseling services instead of debt settlement companies because the fees can be more reasonable and the money management assistance is based on the consumer’s actual financial situation.