Scam Watch

The Pitch: Reduce debt now! It's free!

The Scam: Advertisements on TV and the Web from Debt Set Inc. urged people with financial problems to enroll in its debt-reduction program, according to charges by the Federal Trade Commission. Callers were told they could obtain "50 cents on the dollar" and similar debt settlements. But the federal agency said enrollees were charged upfront fees that had not been adequately disclosed, and that in many cases the company did nothing after collecting the fees.

The Settlement: An agreement filed in U.S. District Court in Colorado calls for monetary relief of $1 million from companies and individuals named in the charges. Although $390,000 of it has been paid, the rest of the judgment was suspended because the defendants said in sworn statements that they could not pay the balance. The defendants did not admit wrongdoing.

The Advice: The Federal Trade Commission's guidance on choosing a debt counselor is at www.ftc.gov/bcp/conline/pubs /credit/fiscal.shtm.

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