Consumer advocacy groups, as well as both state and federal officials have been sounding the alarm about the services offered by unlicensed debt settlement companies for years. These efforts have been driven in large part by the seemingly endless string of horror stories outlining how deeply indebted people have handed over their hard-earned money only to learn that the promises of debt resolution were hollow.
While the domain of unscrupulous debt settlement companies has largely been confined to the area of credit card debt and mortgage debt, recent reports indicate that they are now setting their sights on student loan debt.
This is perhaps not unsurprising given that figures show more than 40 million people here in the United States are carrying over $1 trillion of student loan debt, with many of them struggling to find suitable employment.
How exactly are these unlicensed debt settlement companies victimizing those with student loan debt?