Financial Advice

Payments you Didn’t Authorize Could Be a Scam

Usually, when I pay with a check, I write it out and sign it, or I direct my bank to send it on my behalf. But what if a check is drawn on my account but I didn’t write it, sign it, or tell my bank to send it? It can happen if someone has your bank account number: they can use your number to create a check that takes money out of your account. Now, if you’d already agreed to the charges, there’s no problem. But what if you didn’t? That means this check is part of a scam – which is what the FTC says happened in a case announced today.

The FTC sued several companies and individuals for allegedly taking millions of dollars out of people’s accounts using remotely created checks – without the account owners’ authorization. The defendants had websites and made telemarketing calls that offered short-term loans and cash advances to people with bad credit. To get access to that money, people gave their bank account information. But the FTC says the defendants actually signed people up for online discount membership clubs – and charged for them. People had not agreed to that, and it only made their situations worse. When people complained to the company, the FTC says the defendants lied to confuse people into thinking they had, in fact, approved those charges.

Here are three things you can do to outsmart scammers.

  1. Stop before you put your account information in a website. Ask yourself: who, exactly, am I dealing with? Can I trust them? What will they do with my information? Dishonest people may use your bank or credit card information to take your money, or sell your information to others who’ll do the same.
  2. Review your bank account and credit card statements carefully. Check for charges you don’t recognize, remember agreeing to, or that you didn’t authorize – especially if you recently applied for a loan or credit.
  3. Tell your bank or credit card company immediately if you see a check or charge you don’t recognize. If the unauthorized charge is part of a scam, telling your bank and the FTCmight help stop the scammers.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Financial Advice

Should I Just Wait Till I’m Sued or Have My Tax Return Intercepted Over My Student Loans?


Dear Steve,

I have a few questions about student loans in default. First, I will give you a quick background review:

I have received two pieces of mail of note recently. The first was a bill from GC Services, which I believe holds all three of my private student loans. However, my memory only recalls a total amount borrowed around $65k, but, according to the most recent statement from GC Services, I owe $214,869.75. Obviously, I cannot account for this number and I have no idea where they have calculated this from. I’m not sure how far into default I am, though I have been out of school for about two and a half years and I have never made one payment on any of the private loans. (Side note: the company who holds this debt right now, GC Services, has been calling my boyfriend’s parents about this debt, on their home phone. They gave my boyfriend’s mother personal details on the loan, telling her my name, what the debt was, and my birth date. She lives in Florida (I live in California) and she very specifically told them she is not related to me in any way, I did not live there, and to not call me at their number ever again. They still call every day. They also claimed her name was listed on one of my loan application as a reference, explaining that is how they got her phone number, but I did not even know my boyfriend or his mother when I was in college — this is a complete lie.)

The second piece of mail was received yesterday. It is a notice from the Treasury Department informing me that my tax refund will be held to pay back my federal student loans. Again, I have been out of school for about two and a half years and I have never made one payment on any federal loan, either. The amount they are claiming will be taken from my taxes is $15k which accounts for about one-fifth of what I believe I have in federal student loans. I will not be receiving a tax return this year because I am unemployed (so a wage garnishment is also not an option) and when I do work, I make very little money. I am not married, do not own property, a car, stocks, or anything of value at all.

My course of action on these items is as follows:

Private loans: Continue to not pay them anything until they sue me in which case I hire a lawyer and request that they prove this debt is mine. After seeing the amount they are saying I owe, and its astronomical difference from what I borrowed, I feel that a great portion of this bill could be ruled uncollectible. Not to mention, I have several instances of the collector breaking the law regarding what they’re allowed to do when contacting people about the loan. They also call my dad at work multiple times per day.

As for my federal loans and this tax offset letter, my plan is to request proof of the loan from the government via my loan file, then request for review. However, because the amount that has been noted in the tax offset letter is only one-fifth of the total amount I have borrowed from the government, I wonder if it would be smarter to wait until the full amount has been turned over to the Department of Treasury? The end-goal is to have them all lumped back together in default and then I either consolidate and make low payments using or rehabilitate and arrange either Pay As You Earn Repayment Plan, Income-Based Repayment Plan, or Income-Contingent Repayment Plan.

My questions for you today are:

Would be smarter to wait until the full amount of my federal loans has been turned over to the Department of Treasury for tax offset and then consolidate or rehabilitate?

With regard to my federal loan plans, do you typically see a better outcome when a person consolidates or when they try rehabilitation?

Do you know if there are any pitfalls to arranging either Pay As You Earn Repayment Plan, Income-Based Repayment Plan, or Income-Contingent Repayment Plan?

Would you amend any part of my plans with better options?

Should I wait until the private loan collector sues me before requesting to review my loan files? (The extremely high amount they’re claiming I owe is worrisome, but I honestly don’t care that much about my credit score, so if we’re not factoring that it, are there any reasons why I should force their hand here?)

And finally, triple-checking the facts on this one: Can my bank account be frozen or levied because I’m unemployed and they will not be able to get money from me using wage garnishment or a tax offset, at least for the near future?



Dear Sandra,

Well that was a well detailed question. Thank you.

On the federal loan front you should tackle them right away. Contact your servicer or login to the National Student Loan Data System and confirm the status of your current loans. Then attempt to consolidate all the loans into a new direct loan and select one of the Income Driven Repayment plans to repay that new loan.

The two IDR repayment options that can be problematic are REPAYE and PAYE if you file a joint tax return now or in the future. However, you can qualify on your income alone for the IDR if you file married but separate if you get married. But the IBR repayment option will be based on your income alone.

Even if you are unemployed you should jump on this right now. You will most likely qualify for a $0 payment plan and still remain current. Ignoring your loans will only inflate the balances and fees you will pay.

The loan with the tax offset may have to be rehabilitated first. More on rehabilitation can be found here.

On the private student loan front it sounds like the lack of payments has exploded the balances. There is no way for me to guess if the reported balances are accurate but with no payments the balances will grow large and fast. Fees and even collection costs can be tacked on.

Your approach on this is certainly more optimistic than mine is. If your private loans were from National Collegiate Student Loan Trust then you’d have a better shot and having them unable to validate them. Otherwise, that’s not a guaranteed strategy.

The more logical approach would be for you to connect with an experienced student loan attorney now to come up with a plan. You might want to check with one of the attorneys on My List of Student Loan Attorneys You Should Consider for Assistance.

Strategically defaulting on your private student loan debt is always an option but the more likely outcome will be to settle them rather than have them wiped out. See Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.

If you retain a lawyer they may be able to run interference for you with the collector.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

Financial Advice

FTC Says Operators of Bogus Discount Clubs Took Tens of Millions of Dollars From Consumers’ Bank Accounts without Their Consent

The Federal Trade Commission has charged a group of marketers with debiting more than $40 million from consumers’ bank accounts for membership in three online discount clubs they enrolled consumers in without their authorization.

According to the FTC, the defendants targeted consumers with websites and telemarketing calls that purported to offer payday or cash advance loans. Thinking they were applying for loans, consumers provided their bank account information, which the defendants used to enroll consumers in an online coupon service that cost monthly fees.

The FTC alleges that the defendants used electronic remotely created checks (RCCs) to withdraw from consumers’ accounts an initial fee ranging from $49.89 to $99.49, and recurring monthly fees of $14 to $19.95. Hundreds of thousands of consumers called the defendants to cancel their memberships and request refunds, and thousands of people informed their banks about the unauthorized debits. Throughout the operation of the discount clubs, banks rejected more than 75 percent of the attempts to debit consumers’ accounts. More than 99.5 percent of those who supposedly enrolled in the scheme never accessed any of the discount clubs’ coupons.

The alleged scheme began in 2010, when EDebitPay LLC (EDP), Dale Paul Cleveland and William R. Wilson launched the Saving Pays Club. At the time, they were facing contempt charges for violating a 2008 settlement order with the FTC in another deceptive debiting scam. In 2012, EDP launched a new version of the discount club, Money Plus Saver. In 2013, EDP sold its assets, including the discount clubs, to Hornbeam. Hornbeam then launched a third version of the same discount club, calling it Saving Makes Money, and continued to charge consumers enrolled in the Saving Pays Club and Money Plus Saver.

iStream Financial Services, Inc. processed all of the payments for the discount clubs from November 2010 through April 2016. The FTC alleges that iStream consistently disregarded the high return rates generated by the discount club transactions, as well as other fraud indicators highlighted by its chief risk officer, outside compliance auditors, and the president of its own sister bank. In late 2014, iStream allegedly enabled Hornbeam to artificially reduce its high discount club return rate by allowing it to send thousands of small RCCs to itself.

The defendants in this case are EDP; Dale Paul Cleveland; William Wilson; Keith Merrill; clickXchange Media LLC; Platinum Online Group LLC, doing business as Premier Membership Clubs; Hornbeam; Cardinal Points Holding LLC; Cardinal Points Management LLC, doing business as Clear Compass Digital Group; Gyroscope Management Holdings LLC; Jerry L. Robinson; Earl G. Robinson; James McCarter; Mark Ward; iStream Financial Services Inc.; Kris Axberg; Richard Joachim; and Chet Andrews.

The FTC charged all of the defendants with violating the FTC Act. The Commission also charged the EDP and Hornbeam defendants with violating the Restore Online Shoppers’ Confidence Act. In addition, the FTC charged defendants, except for Mark Ward, with violating the Telemarketing Sales Rule.

The Commission vote authorizing the staff to file the complaint was 2-0. It was filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Financial Advice

Charlotte School of Law Will Surely Blame Others for Closure

The Charlotte School of Law is, or now was, a for-profit college in North Carolina that has been under fire for poor performance.

Under the Obama administration the school was put on notice that because of their poor student performance they would lose access to federal student loans. The American Bar Association had also put the school on notice in February 2016 they were not preparing students for the legal profession.

Under the Trump administration the Department of Education agreed to give Charlotte School of Law access to federal student loan money again after the school had hired a lobbyist who had helped Secretary of Education Betsy DeVos navigate her confirmation hearings.

So it appeared to be game on again for the Charlotte School of Law to go back and selling their for-profit legal education where in 2016 graduates are about 50% unemployed and are 20% less likely to pass the bar exam to become a licensed attorney.

This all circles back to the important issue about access to federal student loan dollars for schools which deliver a less than stellar educational product.

Even though the Department of Education tried to breath life back into the poor performing school the State of North Carolina was having none of that. The University of North Carolina Board of Governors who is responsible for issuing licenses to operate, did not give the school a new license.

WBTV is reporting:

A spokeswoman for North Carolina Attorney General Josh Stein said Tuesday his office would take steps to ensure the school did not operate without a license.

A spokeswoman for Stein said on Tuesday that the Attorney General wrote US Secretary of Education Betsy DeVos to notify her that the school was no longer licensed to operate in North Carolina under state law.

The move could potentially allow recently enrolled students to seek total forgiveness of the loans they took out to attend law school.

“I want to express my disappointment for the students and their families affected by Charlotte School of Law’s failure,” Stein said in a statement. “While good lawyers have graduated from Charlotte School of Law, the school too often failed to deliver for its students.” – Source

Undoubtedly some people are going to blame others for the closure of the Charlotte School of Law. Students in classes there will be hurt. But ultimately this is not a story about regulators taking action and hurting the school. It’s about the school hurting itself and students by offering a substandard product that didn’t meet the standards necessary to continue.

If people want to blame someone here the energy should be turned to the school owners at InfiLaw System which also operates other for-profit law schools.

The website of the Charlotte School of Law today is offering the same type of poor performing help and assistance to visitors.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

Financial Advice

What is the Best Way to Turn My Debt Situation Around?


Dear Steve,

I am several years out of college, with massive debt delinquency. It’s gotten to the point where I don’t even know how my debt is spread out. I was first scared by the bills that were arriving and I was unable to pay after failing to secure a good job. My credit has taken what seems to be irreparable damage.

What is my best bet for turning my situation around? How do I tackle debt spread across several different collectors when I hardly make enough to live? Should I consolidate the debts? and If so how does one go about that?



Dear Jairo,

Please update me in the comments below so I can better assist you.

It’s not clear how much debt you even have. You might not know. If not then the best thing you can do is open the bills that arrive let’s start keeping track or go to and get copies of your credit reports to at least see what is being reported. Credit reports are not all inclusive of all debts but they can be pretty close. Once you can post an update with some of that data you can then make a better decision.

Your first point of attack should be in hunting for that better job. This is often made difficult because of the depression and despair people feel when in debt. It’s hard to shine when you are feeling extinguished.

Once the job situation has been tackled then you can decide what is the best way to deal with the debt. You can look at my Get Out of Debt calculator to see an overview of options.

Frankly in a situation like you describe, bankruptcy is often the fastest way to start rebuilding and least expensive way to a fresh start. See Those That File Bankruptcy Do Better Than Those That Don’t.

By the way, the credit score is easy to repair once we have a solution in place to deal with the debt.

But let’s not get too far ahead of ourselves here. Gather the data and then update me below.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

Financial Advice

Can You Tell Me the Truth About Stopping My Student Loan Wage Garnishment?


Dear Steve,

I have a moderate size of college loans that are in default. I was not and am not able to get a good paying job after school, so I was not able to make payments at all (which looking back on this was stupid that I didn’t try to make some sort of small payment so all this crap didn’t happen).

I then went a few years with no payments, then got a call from people I wasn’t even sure who they were, and they told me if I pay 6-9 months in a row of this certain amount, then my loans would be good again. As they are not good at that time.

So I made the payments and thought I was done. But then a year or two later, I got an email from my HR manager at work, saying 15% of my wages are being garnished!!! An amount I can not afford. I work at a low paying, hourly, dead end job that makes me want to kill myself. I barely barely make rent and have almost no money left over for anything now.

I then was told by another website similar to yours that all I have to do to get out of debt and default was to do a loan consolidation at the website. I choose Great Lakes Company as they were one of only four companies that I was offered. I filled out everything and thought it would be a few days or week until my loans were consolidated and I could get out of default and wage garnishment, get into the repayment plan based on my wages, and finally be able to get a good job, since I wouldn’t have the “bad credit” on my credit report from my defaulted school loans.

Well, I Just got an email back from Great Lakes this morning saying my application has been denied because I have an “Invalid Status”, which they then went on to describe as this: Invalid Status:

To be eligible for Direct Loan Consolidation, you must have at least one Direct loan or one Federal Family Education Loan Program (FFELP) loan that is in Grace, Repayment, or Deferment status. Loans in an In School status or loans with balances of $0 are not eligible for Direct Loan Consolidation. In addition, you are not eligible for Direct Loan Consolidation if:

Your loans are subject to a judgement or an order for wage garnishment.
You have a pending death or disability claim filed.

So now, my question is WHY is this happening? How do I get my loans out of default, how do I get the consolidation to go through? Why did this other great company give me false information about how to go about this? They said the same thing you did, that if I just consolidate my loans, not only can I get out of default, but that I can enter into a Wage based repayment plan that fits with my ability to pay.

But that obviously isn’t the case. I was denied by this Great Lakes company and now I’m at my whits end. I was already in depression and despair that I would never get out of this horrific problem, but now this!! I don’t know what to do, and could really use some help Steve. I’m just about to loose it. Thanks



Dear Ryan,

You’ve been through a lot for sure.

It would not have made a damn bit of difference if you had made a small payment. For your payment to count towards something it has to be in accordance with the payment you are supposed to make or some mutually agreed upon plan payment. This can be as little as $0 per month in an income driven repayment plan.

It appears you clearly have federal student loans and that one servicer mentioned the rehabilitation program which would get your loans out of default and into a good status. I have no idea if you actually enrolled in the rehabilitation program. But after completing it you need to make sure you consolidate your loans and opt for an income driven repayment plan.

Many servicers did/do a poor job of helping consumers do that and you would not be the first person I’ve seen go back into default.

When you are significantly in default and facing a wage garnishment you should have received a letter in the mail describing your right to appeal the wage garnishment. It would have given you a chance to make your case before getting your wages garnished.

Let’s hope the previous servicer did not actually enroll you in a rehabilitation program because you only ever get one chance at that solution.

In the rehabilitation program you would make 9 payments that could be as low as $5 a month on top of your garnishment. At the end of the 5th month the garnishment would stop and after 9 months your loans would be brought back to a current state and you’d be eligible for consolidation.

For more information see The Easiest Way to Stop a Student Loan Wage Garnishment – Loan Rehabilitation.

You can consolidate yourself out of default as long as you are not in a wage garnishment. That’s why that ship sailed for you. This issue is less about them giving you false information and more about the only person looking out for you, has to be you.

For more on the rehabilitation process, click here.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

Financial Advice

Corporate Bailout and American Funding Group Named in Sexually Charged Suit

A reader sent me a tip about debt relief company Corporate Bailout and American Funding Group in the news.

Included int he article is a cellphone video that was leaked titled, “Stripper Gives lap Dance in Office.”

Mark Mancino is named in the story and lawsuit by their former HR Director. But this isn’t the first time Mancino has been accused of such lewd behaviour. Complaints about him back in his Legal Helpers days.

Four years ago I had received an email from Mark Mancino who asked to have the old story about his sexual antics removed from the site. In 2013 I removed the story because I believed Mancino’s claims the story was hurting his kids.

At the time I had told Mancino, “I am a husband and father myself so I understand. And if there were not kids involved, considering the story, I would probably not have pulled it.”

This was in light of Mancino saying, “I am most certainly ashamed of the mistakes that I have made in the past and vow to myself and to my family to learn from them. I thank you so very much for helping in not allowing my children to have to be saddened by their fathers issues in years past.”

Apparently the lessons learned were short lived if we believe the accusations made in the new suit.

From the story ‘Wolf of Wall Street’ has got nothing on this raunchy firm: suit.

In one raunchy example of the alleged debauchery, owner Mark Mancino and manager Michael Hamill were described as regularly summoning a female sales representative to a private office by shouting out, “Wendy — get your t-ts in here.”

Once she was inside the office, Hamill and Mancino could be heard taking turns “motorboating” her breasts, the Middlesex County lawsuit said.

Mancino was also accused of hiring a 22-year-old woman he met at his gym for a $60,000 job and “unlimited access” to the corporate credit card. In exchange for the job and other lavish gifts — including a car and a $4,000 Gucci purse — the worker “wore provocative outfits in the office and, during meetings, intentionally bent over so Defendant Mancino could gawk at her body and rub her inner thigh,” the lawsuit alleges.

Workers were told to keep the alleged affair from Mancino’s wife, who learned about it anyway and is in the process of divorcing Mancino, the lawsuit claims.

The lawsuit also described the time a female employee, encouraged by male managers, lifted her skirt and pressed her bare butt against a glass conference room window for the entire office to see.

Instead of reprimanding or disciplining the employee for the bizarre office strip show, accounts receivable manager Michael Marino gleefully threw himself against the other side of the glass and began “air humping” the worker, proudly exclaiming, “How else could I respond to that?!,” the lawsuit said.

Here is my takeaway, if the allegations in this new suit are true, the ultimate fool here was me for believing Mancino’s past pleas of being a changed man and caring about wanting to protect his wife and children.

Let me close with Mancino’s own words to me from 2013, “I’m not saying that I became a Saint but I have made it a point since all this information hit your site to be a better husband, father and live my life putting the greater good before myself.”

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.