The "Credit Card Debt Termination" Scam

"Legally terminate credit card debt! You can be debt-free in 4-6 months!" Advertisements like this are for a new type of programme that have distribute via the Internet over the past few years. It's called "Credit Card Debt Termination," and victims are paying $1,000s for this fake service. One victim I spoke with lost more than than $15,000! In this article, I'll reexamine the rules behind this programme and explicate exactly why it's a cozenage to be avoided.

First, let's get our definitions straight. The strategy I'm describing here should not be confused with Debt Consolidation or Debt Settlement (also known as Debt Negotiation), both of which are legitimate and ethical methods for debt resolution. The easiest manner to separate the Credit Card Debt Termination cozenage from other valid programs is based on the cardinal claim that you really don't owe any money!

With Debt Consolidation, you pay back all of your debt balances. With Debt Settlement, you pay back a lower amount (usually around 50%) piece the creditor holds to forgive the remaining balance. However, with the fake Credit Card Debt Termination program, boosters claim that you won't need to pay anything at all (except their outrageous fees, naturally). They do the surprising claim that you can legally pass over away your debts simply by using their super-duper magic documents. Based on some legal mumbo-jumbo, the claim is made that you really didn't borrow any money from your creditors!

In order to understand this scam, a small background is necessary. Remember the tax protestation motion back in the 1970s? People were claiming that the Internal Revenue Service tax aggregation system was unconstitutional, and based on their misunderstanding of the tax code, they refused to pay taxes. The Internal Revenue Service came down hard on the tax protestation movement, and through the tribunal system, they blew holes in all the legal statements set forth by the protesters. The Credit Card Debt Termination cozenage is a batch like the tax protestation movement. In fact, among aggregation professionals, it's called the "monetary protestation movement."

Just like the tax protestation movement, there is a common subject that tallies through all of the promotional stuffs issued by the pecuniary protestors. The basic thought is that our Federal Soldier Modesty pecuniary system and generally accepted accounting rules (GAAP) make not allow banks to loan out their ain money. Therefore, according to their interpretation, the credit card banks are the 1s running the cozenage on the American public.

Stay with me here, because the logic is pretty strange. If a bank cannot impart its ain money, how makes a credit card bank widen credit? The claim here is that your credit card understanding itself goes a word form of money (known as a promissory note) the minute you subscribe it. The thought is that the bank "deposits" your understanding as an plus on their books, and then any credit you utilize is offset as a liability against that asset. In other words, the core conception here is that you literally borrowed your ain money from the credit card bank.

So let's state your balance with rudiment Credit Card Bank is $10,000, which you borrowed against the card to do mundane purchases. The cozenage boosters state all you need to make is advise the bank that you desire your original "deposit" back. However, you will allow the bank to offset the amount you borrowed against the amount you have got on "deposit." Presto! You don't owe the balance anymore!

Now, as you can imagine, the banks don't take kindly to such as tactics. Many of the consumers using this technique are getting sued by their creditors. But the swindlers have got more than fast ones available, as if the "smoke and mirrors" financial nonsensicality wasn't enough. One of their techniques is the usage of fake "arbitration" forums. Arbitration is of course of study a legitimate system that allows businesses and people to decide differences without going to court. What make the swindlers do? They manager people on how to put up a fake arbitration forum, for the express intent of making a difference against their creditors! Naturally, the creditors will not direct representatives to some non-existent arbitration forum, so the consumer gets to rubber-stamp their ain arbitration award. If they get sued in a regular court, they show their fake awarding to the judge in the hopes that the creditor's lawsuit will be dismissed.

There are other techniques used by boosters of this scheme, but the cardinal point to retrieve is the cardinal claim that your credit card debt makes not really exist. Of course, it's all nonsensicality based on a misunderstanding of our pecuniary system, and if you step back and believe about for a minute, the truth looks pretty obvious. What these swindlers are saying is that the full $700 billion credit card industry is operating on an illegal basis! Even if the legal theory used by the boosters were true (which it isn't), make you believe for a minute the authorities would allow this giant industry to travel under? That's exactly what would go on if the promoter's claims were proven true and used on a widespread basis.

The Federal Soldier Trade Commission, which have legal power here, hasn't stomped on these con people yet, but it's only a matter of time. Unfortunately, in the meanwhile, consumers are being bilked out of billions of dollars for a worthless programme that volition only get them into deep problem with their creditors. If you are approached by person offering to pass over away your debts using this system, I strongly urge you run in the other direction while you throw on tightly to your wallet or purse.

Remember, you can eliminate your debts if you take a under control attack to your finances, make a budget and lodge to it, and don't utilize your credit cards unless you can pay off new balances in full each month.

Good fortune in your financial future!