95% certain this is a scam

[Curt Harms]

but SWMBO wants to believe. She got a letter with no letterhead, no company name, no address. The top of the page has: RE: Discover, Wells Fargo, Bank of American, Capital One, American Express. A couple lines down is Negotiations Department. Notice Number, Notice Date and Contact Phone 888-xxx-xxxx
Then further down RE: credit settlement.

They're offering to settle (they claim) a credit card balance and personal loan for about 85% of the amount owed, payments over 4 years. She would have to give up any credit cards. That's the only part that makes me think it might be legit. Is this a senior citizen scam?

[Bill Dufour]

I have a feeling any legal document has to have a company name and physical address in the country the recipient lives in. Ask them to mail you documents so your lawyer can review them.
Email costs nothing to scammers, post office does not deliver for free.
Bill D.

[Jim Becker]

No question that letter would go in the shredder if it arrived here...even if it's not an actual "scam" for some reason, somebody's going to make money off the "debtor"...

[Jim Koepke]

but SWMBO wants to believe. She got a letter with no letterhead, no company name, no address. The top of the page has: RE: Discover, Wells Fargo, Bank of American, Capital One, American Express. A couple lines down is Negotiations Department. Notice Number, Notice Date and Contact Phone 888-xxx-xxxx
Then further down RE: credit settlement.

They're offering to settle (they claim) a credit card balance and personal loan for about 85% of the amount owed, payments over 4 years. She would have to give up any credit cards. That's the only part that makes me think it might be legit. Is this a senior citizen scam?

Do you actually have all the cards listed?

By "have to give up any credit cards" do they mean mailing the cards to them? That would sound very much like a scam.

Settling "for about 85% of the amount owed" tells me paying it off over 4 years, depending on the interest rate, you may be paying more than you already owe.

Side note, when paying off a credit card or many other loans, remember the interest accrues daily, if not hourly. I have found the way to pay it off is to send more than is shown as the final balance. You may have to do some calculations to figure out how much more. If you send them too much, don't worry. Financial institutions have OCD accountants and do not like loose ends. You will eventually get any extra back in one way or another.

The British used to call credit purchases "the never never plan" because people never stop charging things and they never pay off the debt.

One of the best days of my life was when all of our debts were closed.

Currently our only debt is the loan on my truck. That is paid automagically through my bank and retirement accounts. Being of the age where, by law, the retirement account has to be drawn down makes it an easy thing to do. When the truck is paid off, we will have a nice increase in our monthly income.

jtk

[Andrew More]

Scam.

I'd expect a legit collection to include contact info other than a phone number, lists of account numbers, and the actual amount owed in each case.

[Michael Schuch]

I have heard news stories (investigational journalists) that have highlighted the way debt management services that advertise on TV swindle the people who call into them. My guess is the best scenario is the letter is from one of these services who don't actually reduce your debt at all. As businesses that pose as being legitimate they do have some access to your credit report and current debts which they can use to make themselves sound legitimate. They do not save you any money. Instead of paying off your debts they charge you a monthly service fee then send the remainder minimal payment amount to the actual debt.

I would guess this is more likely just an out right scam! I would guess that any money that goes to them will never go towards paying for ANY of your debt. The line about giving up your credit cards is just a ploy to make them sound legitimate.

You can usually arrange for favorable payment options by contacting your creditors directly. I would NEVER get a 3rd party involved in that transaction! Business, especially any business that has anything to do with credit, are not altruistic and there to help you out. Any business dealing with credit is there to take you for the absolute maximum amount of money they possibly can. First party lenders do have some motivation to cut you a deal so they receive some of the money owed to them instead of never receiving any. Third party businesses have absolutely NO motivation to help you pay off your debts, they are motivated to do the exact opposite and take as much of your money as they can in the process.

[Ron Selzer]

got similar letter yesterday, except mine said $50,000 dept would be settled for $25,000.
Straight to trash can along with the rest of the junk mail.
pulled it out of the trash can, nothing said about giving up credit cards
Fine print shows Prizm Marketing, LLC .... Texas
refinanced house and now all kind of junk mail is flowing

[Mike Henderson]

No question - it's a scam. Toss it.

Mike

[Brian Elfert]

If a credit card company wanted to make an offer to settle your account the paperwork would generally have their corporate logo and only reference their credit card.

Now, this could be a legitimate company that works with credit card companies to reduce your debt load. I think most people don't realize that you can get credit card companies to work with you to reduce your total debt owed and/or the interest rate. However, there is a cost to doing this. The credit card companies are going to freeze your account(s) and you will get a bad mark on your credit report. This company may work with your credit card companies to reduce your debt load and they get paid a cut of the savings. On the other hand, it could be a total scam to get your SSN and account numbers.

If you truly need help paying your credit card payments you should just contact your credit card issuers and talk about a payment plan. It will likely cost you less than using a company that does this for you.

[Jim Koepke]

Any business dealing with credit is there to take you for the absolute maximum amount of money they possibly can.

This includes the banks issuing credit cards. Interesting that not many companies are sending my credit card offers like they have in the past.

Most of those were torn up and tossed in to the recycling box. It seemed every one of them that wanted to save me money by transferring my other credit accounts to them charged the maximum interest.

It might "save money" on the on the minimum monthly payment. It seems the minimum monthly payment might ave been less than the monthly interest. (why the British used to call it "the never never plan" maybe their laws have changed)

An important feature to remember, the interest on revolving credit and other loans is usually compounded. In effect the user is paying interest on the interest accrual.

If you can not pay off a credit card every month (which actually means paying more than the total due), pay more than the minimum. In fact, pay as much as you can. Depending on the interest rate being charged, an extra $100 or two can save a lot of money in the long run.

jtk

[Kev Williams]

Even if it was legit, paying off debt for less than the balance owed is a "Charge Off", and usually done in one lump sum. But know this, a Charge Off is about as good for your credit rating as completely defaulting on or bankrupting the debt. So, going into debt for four years to FINANCE a Charge Off would be extremely ill-advised (to put it nicely ;) ) ...

The part that screams SCAM to me is the giving-up-of-all-credit-cards nonsense; they're going to want to know which cards...
Just a 480909ploy to get you to give up personal info...

[Curt Harms]

Thanks everyone. You have confirmed what we already suspected. These guys are just not as blatant as I've seen.