The New "Maggot Mile": Debt Relief Companies in Boca Raton, Florida

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.  

The Florida Debt Relief Attorney Scam

Recently I have become aware of a (relatively) new twist on an old scam. During the worst days of the mortgage crisis, there were lots of scam artists promising to help people avoid foreclosure of their under-water mortgages. One of the scams involved using actual practicing attorneys as a front for boiler-room telemarketers selling bogus foreclosure relief. Sometimes these attorneys knew they were being used, and sometimes they didn't.  Telemarketers would call, claiming to work for the attorney, giving the attorney's name, and they would promise that the attorney could defend against the mortgage company, getting homeowners out of a mortgage by making claims against the mortgage companies for mistakes made by the mortgage company.

The new scam is exactly the same as the attorney mortgage scam except the promises involve getting people out of debt generally, especially student loan debt.  Some of the players in the attorney debt relief scam are exactly the same as the attorney mortgage relief scam.

Most of these scam operators seem to come from Florida, often from Broward and Palm Beach counties, with the center in Boca Raton. In the 80s, this area was rife with two-bit penny stock dealers and ponzi schemes scamming people out of their money. It was so bad that the area got the nickname "maggot row" or the "maggot mile".  The Maggot Mile is alive and well in the field of debt relief scams.  How bad is it?  I did a Google search on "boca raton" "debt relief" and "scam", and over came up with over 64,000 hits on articles with all 3 terms.    Widen the search to "Florida" instead of "Boca Raton" and it is over 378,000 hits.  

With this many operators, it is pointless to even try to list them. The players change corporate identities every few months, and they get a new attorney front man even more often.


Why these operations are illegal

If you get called by someone saying he or she is from an attorney's office, and they are promising debt relief of any kind, ask them who their employer is - who sends them the W-2.   You should know that it is unethical in most states for an attorney to pay people to solicit prospective clients on the phone with whom they do not have a prior relationship.  It is unethical for an attorney to promise results.  It is not only unethical but deceptive to tell people that debts can be discharged due to offensive claims when an attorney hasn't reviewed the facts to determine in fact if there are any offensive claims.  It is usually unethical for an attorney to charge a non-refundable advance fee.  Attorneys are not allowed to split their fees with nonlawyers. In the operations that I've seen, the money goes to a third party company, not the attorney.

Debt management and debt relief companies have to give you a a lot of disclosure, have to register at the state level, and are generally barred from charging you an advanced fee. In the operations that I have seen, these attorney scams claim they aren't debt management companies, or debt relief companies. That, quite frankly, is a lie, because they aren't legal law practices either.

These operations usually violate state law as well as the federal Credit Repair Organizations Act. If you have given an attorney money in one of these scams, the odds are pretty good that you can get that money back, and maybe triple damages and attorney fees to boot.  If these companies call you, don't give them the time of day, much less any money. If you do give them money, call an experienced consumer attorney. If you are in Indiana, you can call me at 317-662-4529 or outside of Indiana, use the National Association of Consumer Advocates' "find an attorney" page to find an attorney in your area.