Advanced Management Services

The FTC charged that Advanced Management Services NW LLC, and several co-defendants called consumers and claimed that they could negotiate with credit card issuers to substantially lower the consumers’ credit card interest rates. They allegedly delivered prerecorded “robocalls” with messages urging consumers to “press one” to speak with someone. Many consumers believed the calls came from their credit card company. The defendants charged consumers up to $1,590 and promised a refund if they failed to deliver at least $2,500 in interest rate savings. But, instead of arranging reduced interest rates, the defendants sent consumers instructions to pay down their credit card debts early to save money on interest. Consumers who demanded refunds allegedly were denied outright, got the run-around, or had a $199 “nonrefundable fee” deducted from their refund.

Under two settlement orders, all of the Advanced Management Services defendants are banned from selling debt relief services. The defendants, who were based in Washington and Texas, are also prohibited from misrepresenting material facts about any good or service, selling or using customers’ personal information, failing to properly dispose of customer information, and collecting payments from their debt relief customers.

The order against PDM International Inc., also doing business as Priority Direct Marketing International Inc., and William D. Fithian, also bans them from telemarketing and from violating the FTC’s Telemarketing Sales Rule, and imposes a $13.8 million judgment. The order against Advanced Management Services NW LLC, also doing business as AMS Financial, Rapid Reduction Systems, and Client Services Group; Rapid Reduction System’s LLC; Ryan David Bishop; and Michael L. Rohlf; imposes an $8.1 million judgment. Both judgments, which represent the total amount of money consumers lost, will be suspended when the defendants have surrendered virtually all of their assets, including several luxury cars, a boat, jet skis, and ATVs. The full judgments will become due immediately if the defendants are found to have misrepresented their financial condition.

The FTC acknowledges the assistance of the Better Business Bureau of Eastern Washington, North Idaho, and Montana, and the BBB of Fort Worth, Texas; the U.S. Postal Inspection Service; the Bedford, Texas, Police Department; and the attorneys general of Illinois, Minnesota, North Carolina, North Dakota, Washington, and West Virginia.

Dynamic Financial

In a second case, the FTC alleged that Dynamic Financial Group and other defendants told consumers that, for an up-front fee of up to $1,995, they could save consumers thousands of dollars by reducing their credit card interest rates, and help them pay off their debts faster. The FTC further charged that the defendants promised, falsely, a full refund if consumers did not save a “guaranteed” amount – typically $2,500 or more. However, the defendants allegedly did not negotiate lower interest rates for consumers or failed to provide refunds.

Under five settlement orders in this case, all of the defendants are banned from selling debt relief services. These defendants, who are based in Canada, Florida, and New Jersey, also are prohibited from misrepresenting material facts about any good or service, violating the Telemarketing Sales Rule, collecting payments from their debt relief customers, using or selling customers’ personal information, and failing to properly dispose of customer information.

The order against 2145183 Ontario, Inc., also doing business as Dynamic Financial Resolutions Inc.; The Dynamic Financial Group (U.S.A.) Inc.; R&H Marketing Concepts Inc.; America Freedom Advisors Inc.; Joseph G. Rogister; and Christopher M. Hayden also bans them from robocalling and imposes an $8.3 million judgment that will be suspended due to the defendants’ inability to pay.

The order against Thriller Marketing LLC, Dwayne J. Martins, and John L. Franks Jr. imposes a $4.9 million judgment that will be suspended when Martins has surrendered the proceeds from selling a 2005 BMW 645 and Franks has surrendered the proceeds from selling two business condominiums in Tampa. The order against Frank Porporino Jr. also bans him from robocalling and imposes an $8.3 million judgment that will be suspended when he has surrendered certain assets. In each instance, the full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The orders against Michael Falcone and Sean Rogister also ban them from robocalling and impose judgments of $93,137 and $90,473, respectively, which must be paid immediately.

On April 27, 2011, a default judgment was entered against Alpha Financial Debt Group Inc. That order imposed a $8.68 million judgment and banned the company from robocalling. Litigation will continue against the remaining defendant, Philip N. Constantinidis.

The Commission vote approving the Advanced Management Services proposed consent judgments was 3-1-1, with Commissioner Rosch dissenting and Commissioner Brill recused. The FTC filed the proposed consent judgments in the U.S. District Court for the Eastern District of Washington. The court entered the consent judgments on April 27, 2011, and May 3, 2011. The Commission vote approving the Dynamic Financial proposed consent judgments was 5-0. The FTC filed the proposed consent judgments in the U.S. District Court for the Northern District of Illinois, Eastern Division, where they were entered by the Court on April 27, 2011.

Law enforcement organizations at the international, federal, state, and local levels provided valuable investigative assistance in bringing this action. The FTC would like to thank the following for their help: The U.S. Postal Inspection Service; the Florida Department of Agriculture and Consumer Affairs; and the Toronto Strategic Partnership, which includes as member agencies the Competition Bureau Canada, the Toronto Police Service Fraud Squad – Mass Marketing Section, the Ontario Provincial Police Anti-Rackets Section, the Ontario Ministry of Consumer Services, the Royal Canadian Mounted Police, and the United Kingdom’s Office of Fair Trading. Valuable assistance also was provided by the Better Business Bureaus of Central, Northern & Western Arizona; San Diego; and Metropolitan New York.

STEVEN

————

Steven,
 
This is a difficult question to answer without more information, but my personal opinion is that if you owe the money and they are your accounts then you should pay the debt you owe, but you will want to know that by paying those items off you will renew the “date of last activity” and the score will drop.  
 
Credit repair is not the removal of debt, but the removal of inaccurate and unverifiable items from a credit report.  If you are in a state of financial hardship and can’t afford your bills then repairing and improving your credit picture should come after you get back on track financially.
 
Brian C. Aber
877-877-4834 x704

It appears that the lenders are content to sit on the liens and the community still requires me, the owner, to upkeep the properties, which is as it should be. I doubt these properties would sell at sheriff’s sale due to the large tax lien which would still be in place even if the 1st mortgages were paid .  The mortgages are for much more than the appraisal values due to the bubble bursting. 

All the properties have PMI on them.  I would think the lenders would simply walk away, release the liens and collect from the PMI company.  Is there any way I can force the lenders to move ahead with whatever action they chose to take?  I have even offered to let them rewrite the loans for a smaller amount and I would still accept the tax liens which I will have to resolve anyway. 

My income is way more than enough to qualify for the mortgages.  I have no other debt due to the discharge.  It seems to me that this would be a good answer for me and the lenders.  They would cut their losses and I would get my properties back at lower principals.  I don’t understand their failure to accept this deal when they are looking at a loss which is much higher.  Can you suggest any resolution or tell me why they may be reluctant to rewrite the loans?

Mel

———

Hello Mel,

The IRS has 120 days to redeem the property and specifically Internal Revenue Manual 5.12.5.1(3) states:

“Whenever a judicial sale of real estate is made to satisfy a lien that is prior to that of the United States, the United States shall have not less than 120 days, (or longer if state law provides) from the date of that sale within which to redeem the property. (See Section 2410(c) of Title 28 U.S.C.)”

The properties would only be redeemed if there is equity.  IRM 5.12.5.1.1(2) states (in part) that “redemption investigations are determined by the taxpayer’s unpaid balance of assessment and the government’s equity in the property for redemption purposes. If this criteria is not met, then no investigation will be initiated.”  So, the IRS liens are not a problem based on “(t)he mortgages are for much more than the appraisal values due to the bubble bursting.”

Any liens that result from the unpaid property taxes or municipality code violations stick with the property.  The unpaid property taxes become ‘super liens’ and are superior to any mortgages ever recorded.  Check your local area regarding municipal code violations.  In Florida foreclosure, any unpaid municipal liens will stick with the property and have to be paid (eventually) by the buyer.

The lender is more likely to offer a short sale with full release than to offer a short refinance where you retain the properties.  The reason a lender doesn’t want to offer principal reductions to the borrower is that they feel that every borrower will then want a principal reduction.  That doesn’t mean you shouldn’t make your request known. 

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

I am estimating I am upside down $30-40k in a 2004 RV with low miles. I have about $30k in CC debt. I own no home. I have good credit and have never been late on rv payment.

Will they consider a short sale if I have a bit of a nest egg in my SEP account? It is my only retirment.

Jen

——-

Hi Jen,

A creditor will consider a short sale when the debtor has retirement funds.  We typically write ‘survives bankruptcy’ instead of listing an actual dollar amount on the financial statement.  

Read: Short Sale & Retirement Accounts

Thanks for the questions and hope this helps.

Paul

We sold our house in Arizona as a short sale.  We had a second mortgage on the property. We paid the back interest on the second and started making the mortgage payments.  Due to a 30% reduction in pay we could not keep up the second mortgage payments. 

We asked the bamk if they would re-negotiate our payments.  However, they weren’t willing to do this.  We didn’t make a payment on the loan the past two months. 

I just logged into my account and went to make a payment and it stated a zero balance and that the loan had been charged off.  I’m not sure what to do now? I could make half the loan payment for 3 years then start making the full payment since I will have other debt paid off by then.

Not sure why they would charge it off instead of lowering my payment for the short term. Should I contact the bank?  I haven’t received anything in the mail regarding the loan charge off.

Annemarie

————–

Hi Annemarie,

I’m a little puzzled myself on why it would list a zero balance.  It may have been charged off and sold to a junk debt buyer or perhaps it was considered a settlement in full.

I’d probably let sleeping dogs be for now.  If another entity picks up this account then be aware of your validation rights.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

This is a RV. The bank told us to short sale it. We sell it for less and we get a 1099 from them to report on our taxes. Is this correct?

My husband lost his job and we no longer can afford the payments. The bank will not lower the interest rate.

So it is either give it back or short sale!!

Tenna

——–

Hi Tenna,

That is correct.  Forgiveness of debt is generally treated as income; however, look at IRS form 982 and see if the insolvency exclusion can remove or reduce any tax burden.

Also, give me some info on the RV and maybe I’ll buy it.

Thanks for the questions and hope this helps.

Paul

This author is not a tax advisor and this information should not be considered tax advice.  Please consult a qualified tax advisor for tax advice.

First off, many thanks to you for providing great insight and information on your blog!!

By following your “words of wisdom” I am in process of completing an approved short sale in which the lender has agreed to allow a full release of liability, a trade line entry of “Settled” (with no further language), and a zero balance.

My question is regarding the “Charge Off” listed (in their letter below). Does the “Charge Off” solely mean they will be writing off the loss in regards to tax filing? Or does it have other ramifications?

Do you have an idea of how this overall scenario (including the charge off) will affect credit and how long will it remain there?

Thanks again for being a “guiding light” for many of us!

Bob L.
Las Vegas

Copy of letter from lender follows:
Yes, we are agreeable to report “Settled” to the credit repositories without further language.  However, due to the large loss the Credit Union will be taking, due to our agreement with you not to pursue any deficiency balance, we will need to charge off the remaining balance on your Home Equity Line of Credit after the settlement.  When that transaction occurs, “Charge Off” will show on the Credit Report, although the amount due will show as “$0.00” as we will not be pursuing any recovery.

—————

Hello Bob L. Las Vegas,

You’ve done a great job.  Aside from having the lender remove the tradeline, what you’ve negotiated is the best that can be accomplished. 

The only other part I might add is that some time after the short sale closes and you’ve run your credit report, examine it closely to see whether or not there is an error.  Both the Fair Credit Reporting Act dispute process and the Real Estate Settlement Procedures Act Qualified Written Request can be used to clear up any errors.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

So another attorney filed the papers with Bank of America for the loan modifiction. Basically that was all he did. He told us we could check with Bank of America ourselves. So far there has been nothing.

We went to see a bankruptcy attorney and he said that we need to get this loan modified.

I talked to my Father and he asked me to find out if it was possible if the Bank would settle the loan for 50% of what is owed. Will they do this?

Thanks for any and all help.

Noelle

———

Hi Noelle,

It’s possible that Bank of America will do a short payoff to you at 50% of the balance.  Factors that might go into that are the value of the property, the level of delinquency, your financial condition, and the type of loan that you have.  If it were me, I wouldn’t volunteer that the funds would be coming from Dad, but perhaps try to get an approval for a short refinance.

A short sale would have a much greater likelihood of approval; however, a relative would probably not be able to be the buyer.  I believe it all has something to do with: if the bank gives one borrower a principal reduction then every borrower will want a principal reduction.  The fear would be an increase in ruthless default.

Thanks for the questions and hope this helps.

Paul

My question is 2 1/2 yrs ago my jeep Cherokee was reposessed because I was in jail for a few months. My original loan was through wells Fargo and has been sold to arrow acceptance. I am wanting to by a house now and my fico median is around 680. 

The loan has been turned over to a law firm who says nothing will be reported on my credit until it is paid in full. They threatned to sue me but I am a merchant mariner and it is impossible to place a garnishment or attatchment against my wages according to u.s.c. 46 part 11109. I told them this about a year ago and they have not responded back.

My real question is should I use a dept settlement company to pay them off or should I just say screw them. My credit has already taken the hit for the repo but I don’t know if a settlement would further hurt my score.

The owed balance is $10500 they said they would settle with me for $8500. I think this is hi being that they in no way can garnish my wages what amount should I be looking g to settle at? 

Thanks for any help or advice.

Taylor the towboater

———————-

Hello Taylor,

Wage garnishment is only one means by which collection on a judgment can be pursued.  A judgment – if it gets to that stage – can also lead to garnishment of bank funds or attachment to any other asset owned.

I’d guess that balance could be settled for half of what was offered, but bear in mind that from a credit reporting standpoint – if the law office is collecting and nothing is on the credit save the original tradeline which shows a $10,500 balance, then settling this 2.5 year old account without a pay for delete will probably reduce the credit score.

Read: Dana’s Story

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

(pause)

I want the best for everyone everywhere and this article won’t travel down a political road, other than to make a comment that we, as a people, have become complacent.  I’m reminded of these words: “But many [that are] first shall be last; and the last first”.  I’ll now turn this article’s steering wheel into the Personal Finance Path.  Woah!  Look out!  It’s a rocky road and for some there’s a roadblock up ahead.  Fortunately, with a little maneuvering, the roadblock can be avoided altogether.  And don’t ask me about the cliff – we’ll get to that later.

The Broken Credit Blog is thankful for the many positive responses from readers who’ve shared true to life experiences of how they’ve triumphed over adversity.  It’s the goal of this site to be a positive voice in the marketplace sharing free information to anyone desiring credit score improvement.  This month marks our forty-second-month on the internet and we’ve recorded over two million hits in one month.  We are at the same time, amazed and thankful – it keeps us writing and working for you.

In my view, personal finances are similar to personal fitness.  I regularly see people working out at the gym with a personal trainer.  The same trainer may be working out with one person on one day and another on another day.  Regardless of that person’s fitness level, the trainer’s goal is to improve that individual at that time.  It doesn’t matter how out-of-shape or how Olympic-world-champion someone might be – the trainer’s goal is to assist that person with improvement.  Such is the same as the Broken Credit Blog’s role.

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So, wherever you are, and whatever your station in life, this trainer wants to see improvement in you.  I hope everyone enjoys their 4th of July and remembers what prompted the celebration in the first place.  Now then, after everyone has finished eating hamburgers and hotdogs, it’s time to start working out.

Hey you with the 672 FICO, give me eight more reps!