This is a great Article about terminating Credit Card Debt. Folks its a scam so read this article and learn so you don’t give your hard earn cash to any of these companies.

The “Credit Card Debt Termination” Scam
By Charles Phelan

“Legally terminate credit card debt! You can be debt-free in 4-6 months!” Advertisements like this are for a new type of program that has spread via the Internet over the past few years. It’s called “Credit Card Debt Termination,” and victims are paying $1,000s for this bogus service. One victim I spoke with lost more than $15,000! In this article, I’ll review the principles behind this program and explain exactly why it’s a scam to be avoided.

First, let’s get our definitions straight. The scheme 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 way to distinguish the Credit Card Debt Termination scam from other valid programs is based on the central 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%) while the creditor agrees to forgive the remaining balance. However, with the bogus Credit Card Debt Termination program, promoters claim that you won’t need to pay anything at all (except their outrageous fees, naturally). They make the surprising claim that you can legally wipe 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 little background is necessary. Remember the tax protest movement back in the 1970s? People were claiming that the IRS tax collection system was unconstitutional, and based on their misinterpretation of the tax code, they refused to pay taxes. The IRS came down hard on the tax protest movement, and through the court system, they blew holes in all the legal arguments put forth by the protesters. The Credit Card Debt Termination scam is a lot like the tax protest movement. In fact, among collection professionals, it’s called the “monetary protest movement.”

Just like the tax protest movement, there is a common theme that runs through all of the promotional materials issued by the monetary protestors. The basic idea is that our Federal Reserve monetary system and generally accepted accounting principles (GAAP) do not permit banks to loan out their own money. Therefore, according to their interpretation, the credit card banks are the ones running the scam on the American public.

Stay with me here, because the logic is pretty strange. If a bank cannot lend its own money, how does a credit card bank extend credit? The claim here is that your credit card agreement itself becomes a form of money (known as a promissory note) the moment you sign it. The idea 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.

So let’s say your balance with ABC Credit Card Bank is $10,000, which you borrowed against the card to make everyday purchases. The scam promoters say all you need to do is notify the bank that you want your original “deposit” back. However, you will permit the bank to offset the amount you borrowed against the amount you have on “deposit.” Presto! You don’t owe the balance anymore!

Now, as you can imagine, the banks don’t take kindly to such tactics. Many of the consumers using this technique are getting sued by their creditors. But the scammers have more tricks available, as if the “smoke and mirrors” financial nonsense wasn’t enough. One of their techniques is the use of bogus “arbitration” forums. Arbitration is of course a legitimate system that allows businesses and individuals to resolve disputes without going to court. What do the scammers do? They coach people on how to set up a fake arbitration forum, for the express purpose of making a dispute against their creditors! Naturally, the creditors will not send representatives to some non-existent arbitration forum, so the consumer gets to rubber-stamp their own arbitration award. If they get sued in a regular court, they present their bogus award to the judge in the hopes that the creditor’s lawsuit will be dismissed.

There are other techniques used by promoters of this scheme, but the key point to remember is the central claim that your credit card debt does not really exist. Of course, it’s all nonsense based on a misinterpretation of our monetary system, and if you step back and think about for a minute, the truth seems pretty obvious. What these scammers are saying is that the entire $700 billion credit card industry is operating on an illegal basis! Even if the legal theory used by the promoters were true (which it isn’t), do you think for a moment the government would allow this giant industry to go under? That’s exactly what would happen if the promoter’s claims were proven true and used on a widespread basis.

The Federal Trade Commission, which has jurisdiction here, hasn’t stomped on these con artists yet, but it’s only a matter of time. Unfortunately, in the meanwhile, consumers are being bilked out of millions of dollars for a worthless program that will only get them into deep trouble with their creditors. If you are approached by someone offering to wipe away your debts using this system, I strongly recommend you run in the other direction while you hold on tightly to your wallet or purse.

Remember, you can eliminate your debts if you take a disciplined approach to your finances, make a budget and stick to it, and don’t use your credit cards unless you can pay off new balances in full each month.

Good luck in your financial future!

Charles J. Phelan has been helping consumers become debt-free without bankruptcy since 1997. A former senior executive with one of the nation’s largest debt settlement firms, he is the author of the Debt Elimination Success Seminar™, a five-hour audio-CD course that teaches consumers how to choose between debt program options based on their financial situation. The course focuses on comprehensive instruction in do-it-yourself debt negotiation & settlement designed to save $1,000s. Personal coaching and follow-up support is included. Achieves the same results as professional firms for a tiny fraction of the cost. http://www.zipdebt.com/article2

Article Source: http://EzineArticles.com/?expert=Charles_Phelan

Credit “Repair” Promoters Face $1 Million Penalty: “August 11, 2003
One of the country�s largest credit-repair operations has agreed to pay more than $1.15 million in consumer redress to settle Federal Trade Commission charges that it violated federal law.
The settlement resolves charges leveled by the FTC against six Michigan-based defendants in a federal court complaint. The defendants, who sell credit-repair services through a multilevel marketing organization, allegedly falsely claimed that they could remove derogatory information from consumers� credit reports, even if that information was accurate and not obsolete.
The defendants purported to do this through the use of a �one-of-a-kind� computer disk that they claimed could search and identify errors in the process used by the credit reporting agencies to enter negative items onto consumers� credit reports. The Commission�s complaint alleges that the defendants� representations about the computer disk are false and deceptive.
�Consumers who find themselves with less than perfect credit histories should be wary of anyone offering a quick fix to the problem,� said Howard Beales, Director of the FTC�s Bureau of Consumer Protection. ‘Mistakes can be corrected, but there is no substitute for time and self-discipline to improve your credit report if the information is accurate.�”

Credit Repair
Credit Repair Blog

i-Newswire, 2005-05-25 – In 1999, Florida Attorney Jack Schrold settled charges that he violated the FTC Act and CROA by making deceptive claims about improving consumers’ credit reports and requiring advance payment for credit repair services. The court order settling these accusations prohibited Schrold from saying he could improve substantially consumers’ credit reports by removing accurate, but negative, information that was verifiable and not obsolete, making false claims about the services he sold, charging consumers before credit repair services were finished, and violating CROA.

In 2004, at the FTC’s request, the Department of Justice initiated civil contempt proceedings against Schrold, alleging that he was violating the 1999 order. Schrold agreed to settle the contempt allegations, and as a result of that settlement the court has entered a modified order against him.

The court order announced today requires Schrold to pay $100,000 in civil penalties and permanently bars him from:

advertising, marketing, or selling any credit repair service, or assisting others to do so;
violating the FTC Act by representing directly or by implication that he is able to improve substantially consumers’ credit reports by removing negative information from them where such information is accurate, verifiable, and not obsolete; and
violating CROA.
The modified order also contains standard recordkeeping provisions designed to assist the FTC in monitoring Schrold’s compliance.

Consumers should know that nothing you can do – or pay someone to do – can legally remove negative information that is accurate, verifiable, and not obsolete from your credit report. Only time, a deliberate effort, and a plan to repay your bills will improve your credit record. If your credit reports contain inaccurate or incomplete information, however, you do have the right to have that information corrected. This is something you can do yourself. For information on disputing credit report errors and other information about your consumer credit rights, please visit the FTC’s Web site at http://www.ftc.gov or call the 1-877-FTC-HELP ( 1-877-382-4357 ).

The Commission vote approving the filing of the modified order was 5-0. The modified stipulated judgment and order for permanent injunction and civil penalties was filed by the United States Attorney’s Office for the Southern District of Florida and the Department of Justice’s Office of Consumer Litigation, at the request of the FTC, in the U.S. District Court for the Southern District of Florida. It was entered by the court on April 22, 2005. The matter was handled by the FTC’s Midwest Region.

Copies of the modified stipulated judgment and order are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish ( bilingual counselors are available to take complaints ), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP ( 1-877-382-4357 ), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
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