At New Era, one of our goals is to provide consumers with useful information about the available debt programs. Selecting a debt solution is an important financial decision, and we want people to choose wisely. Accordingly, consumers should be warned about a relatively new type of scam that has spread via the Internet over the past few years. It usually goes by the name "Credit Card Termination," or some variation on that name, and victims are paying thousands of dollars for this bogus service. We have heard of people being billed of up to $11,000 in this scam, and fees of $2,500 to $5,000 are quite common.

The scheme we're describing here has absolutely nothing to do with legitimate Debt Settlement (or Debt Negotiation) as practiced by New Era. The most straightforward way to distinguish the "Credit Card Termination" scam from legitimate programs is to realize that the con artists make an impossible claim right up-front. Based on a misinterpretation of obscure banking and accounting rules, they claim that you really don't owe any money to the credit card banks!

With Debt Consolidation or Credit Counseling, you pay back all of your debt balances in full. With Debt Settlement, you pay back a lower amount (usually 50% or less), while the creditor agrees to forgive the remaining balance. However, the promoters behind the "Credit Card Termination" scam claim that you don't need to pay anything at all (except their huge fees, of course)! They claim you can wipe away your debts forever with a few simple documents that magically prove you really didn't borrow any money from your creditors.

This scheme has its roots in the income tax protest movement of the 1970s, where people were claiming that paying taxes was unconstitutional. Among professionals in the collection industry, the "Credit Card Termination" scam is called the "monetary protest movement." The common theme with these programs is that our banking system prohibits banks from lending out their own money. So how does a credit card bank extend credit then? The protesters claim that the credit card agreement itself becomes a form of money the moment you sign it. The idea here is that the bank "deposits" your agreement as an asset on their books, and then any credit you use is offset as a liability against that asset. In other words, the core concept here is that you literally borrowed your own money from the credit card bank! The scam promoters claim that all you need to do to wipe out your debt is demand your original "deposit" back from the bank, which will be offset against what you borrowed. This is truly "smoke and mirrors" nonsense!

There are other tricks used by the scammers, like bogus arbitration forums, special letters, and phony financial forms. But again, it's all nonsense based on a misinterpretation of our financial and accounting system. As you can imagine, the banks are not too happy about this scam, and consumers have been getting sued aggressively by their creditors after trying this technique. Hopefully, the government will shut down these shady operators soon, the way the IRS shut down the tax protesters. Meanwhile, if you're approached by someone claiming you can completely walk away from your obligations by using their special documents, steer clear!

There is simply no comparison between this scam and the legitimate technique of Debt Settlement as practiced by New Era. Through the process of negotiation, a compromise is worked out on your behalf with each of your creditors, on a pace that your budget can handle. It's an honest and ethical solution to excessive personal debt that allows for a win-win scenario between you and your creditors. The key point here is that you must still honor that settlement! You still have to do your part to fund the program, and no one is promising you an overnight cure for your debt problem. But if you're looking for a viable alternative to bankruptcy, you owe it to yourself to consider Debt Settlement as your chosen debt solution.

During your FREE, no-obligation consultation, we'll analyze your situation and help you determine the best approach for your circumstances. We're here to help!