There’s a new scam in town! It’s called “Debt Validation.”
While the life of a consumer protection lawyer can be riveting, it isn’t every day that you see the birth of an entirely new scion of the American scam industry. Well, today was my lucky day. I got a call from a potential client (we’ll call him “Ricky”) who had questions about his dealings with a company called “Ace Services.” They had offered him – at the low, low price of $2,136 – some “debt validation services,” which were supposed to somehow prevent his creditors from being able to collect from him.
The exact mechanism of this was not clear, and their website is equally obscure. Most of it is filled with anonymous corporate puff (“The principles and managers at ACE have decades of combined experience in consumer finance and always place our customers needs first”), and their page on debt validation gives this detailed explanation: “Let the professionals at Ace connect with your lenders to determine the validity of a debt.”
Their agent sounded more knowledgeable on the phone, so Ricky signed up. He started paying, and put his debts into their supposedly trustworthy hands.
We don’t know what exactly they did for him – they never sent him statements to tell him what they were doing with his money, and they didn’t furnish him with copies of any documents they sent to his creditors.
But we do know what they didn’t do: deal with his debts. A few months later, his creditors started coming after him for money again. The “validation” service had failed. His money was gone.
This is what always happens when you hire a debt settlement scam. These folks call their (dis)service “debt validation,” but they use the tried and true methods of old-fashioned debt settlement scams. It usually starts with an internet advertisement that directs you to a different company, then electronic documents are electronically signed. (For some reason, debt settlement scammers love DocuSign. I guess the lack of a physical paper contract makes it easier to hook the customer in before they have time to think about what they’re doing).
Then they start drafting money from your account and assure you with phone calls that you’re affairs are being handled competently, but you’ll have to be patient. Then you don’t hear anything for a while, because your creditors are leaving you alone while they deal with the temporary but legally toothless paperwork that the debt settlement/validation company is sending them. This leads you to think “Yes! It worked! I didn’t get scammed! I’m going to be debt free!”
Until a few months go by and the debt settlement/validation folks have paid themselves from the secret bank account they set up in your name and then suddenly you start getting waves of phone calls and letters from new debt collectors asking you to pay off the debts you foolishly entrusted to scammers in Florida. (NOTE: Most scammers are in Florida. South Florida. This is because Florida has an unlimited homestead exemption, and scammers know they’re eventually going to get sued, and they can pile up all their money in a multimillion dollar mansion and not lose it even if they get hundreds of judgments against them.)
And then you realize that your money is gone, and instead of paying your creditors, you paid a crook in South Florida. This is inadvisable. So here’s the lesson: NEVER EVER EVER HIRE A DEBT SETTLEMENT, DEBT NEGOTIATION, OR DEBT VALIDATION COMPANY. They are all scams.
If you want more information about ACE Services, their website is www.ace-sg.com. Their real name is:
Ace Sales Group, LLC
675 West Indiantown Rd, Ste 205
Jupiter, FL 33458.