For a while, in the late 1980s, I lived in South Florida. At that time, penny stock fraud was a huge problem, and some of the sleaziest penny stock brokerage houses operated out of sweatshop call centers set up in Boca Raton, Florida. Because all of these brokerages were so close to each other, the area developed the nickname “Maggot Row”, sometimes called “The Maggot Mile”.   It looks like the maggots have switched to a new industry, “debt relief”.  I put it in quotations because I don’t think a lot of their customers feel very relieved.

Boca Raton Florida has an estimated population of around 92,000 people.  Look at all the “debt relief” companies that came up on a simple search at manta.com.

1st National Credit Services Corporation
Absolute Debt Solution
Accelerated Debt Consolidation
Acci Inc.
Advanced Credit Solutions Inc.
American Consolidated Debt
American Corporate Turnaround, Inc.
American Debt
American Debt Negotiators
American Debt Settlement Solutions, Inc.
Amerifinancial Solutions, LLC
A Plus Financial Solutions
Bmv Corporation
Capital Debt Relief
Clear Debt
Consumer Credit Counseling Service
Consumer Credit Counseling Service of South Florida
Consumer Debt Counselor Group
Consumer Debt Counselor Group LLC
Credicare Credit Counseling
Credit Repair
Credit Repair Doctor
Credit Restoration
Dartmouth Foundation, Inc.
Debt B Gone
Debt Franchise Inc.
Debt Management Solutions
Debtmet LLC
Debt Pro Assoc LLC
Debt Relief Group Inc.
Debt Relief Law Florida
Debt Relievers Inc.
Debt Remedy Consultants
Debt Remedy Solutions LLC
Debt Solution Partners
Deudas Consolidates Inc.
Freedom Debt Management
Great American Credit Repair
ioudebtsolutions.com
Managed Debt Solutions
New You Credit Repair
Oasis Credit Solutions
Premier Debt Center of Boca Raton
Resolvly
Say No to the Bank
Student Debt Experts

This is 46 firms identified by Manta as debt relief companies in Boca Raton alone.  A few of these might not technically be debt relief companies, but on the other hand, this list does not include a number of attorneys who are used as fronts for debt relief companies, and some companies might have been missed completely.

If these firms have 20 employees on average, roughly 1% of the population of Boca Raton works in the Debt Relief industry, and if you assume that half of the population of Boca Raton is made up of either retired people or children, then it would be 2% of the population of Boca Raton works in the debt relief industry.

While it is theoretically possible that not all debt relief companies are running a scam, there are some practices that are clearly outside of the bounds of propriety:

1. Selling debt relief by telemarketing.  It is virtually impossible for debt relief telemarketers to comply with the FTC Telemarketing Rule. Most of them don’t even try. If the telemarker approaches you on behalf of an attorney or law firm, understand that almost every state has rules against soliciting clients, especially paying third parties to solicit clients.

2. Nonrefundable fees.  The FTC and various states have rules about when debt relief companies are allowed to take a fee.  To overly simplify: the fee received must be proportional to the debt actually negotiated and the fee must only be taken after the debt was reduced.

3. The names of other companies showing up in either the servicing of accounts or the processing of accounts.

4. Any involvement of an attorney in the mass settlement of debts except for the practice of bankruptcy law.

5. Any talk of “natural law” or “sovereign immunity”.

I could go on and on.  Investigate a company before you hire them. Ask for references.  Just don’t give one a pile of money. If you are in a contract with a debt relief company and you want to know if you have to keep paying on the contract or if maybe you can get your money back, contact a consumer attorney in your area through the National Association of Consumer Advocates’ “Find an Attorney” page.