The Federal Trade Commission (FTC) has filed a complaint and obtained a preliminary injunction against American Consumer Rights Organization, aka “ACRO Services,” and its related companies. This Atlanta-based organization offered credit card debt relief services. The Better Business Bureau of Metro Atlanta (BBB) reports on known government actions involving business marketplace conduct.

The FTC has alleged that ACRO Services and its owners Sean Austin, John Steven Huffman and John Preston Thompson took millions of dollars from people by falsely promising to eliminate or substantially reduce their credit card debt.

“Regardless of how the debt happened, when faced with mounting bills and difficult budget decisions, unscrupulous business operators who promise to repair credit or eliminate debt for a fee is simply a promise that ACRO Services cannot keep,” said Simone Williams, media and public relations lead for BBB. “This business has an F-rating due to BBB’s concerns with the business practices, the volume of complaints BBB received against the business and failure to be responsive to 28 customer complaints, but also because credit-repair companies like this one are illegal in Georgia.”

What is the difference between credit counseling, debt relief, debt consolidation and credit repair?

Credit counseling is the most comprehensive solution, focusing on various resources to help solve financial issues. It also requires the most work and doesn’t promise immediate relief. Tools include budgeting, educational programs, access to counselors and a personalized plan. Credit counseling may (but doesn’t always) lead to a Debt Management Plan (DMP), where funds are deposited into an account, and the agency pays debts from that account.

The BBB has a listing of Accredited Businesses that provide credit and debt counseling for people looking for assistance.

Debt relief or settlement companies help by renegotiating the debt so that the person doesn’t owe as much. These companies reach out to creditors and work with them to lower the balance, interest rates or fees. Consumers can also do this to avoid the costs that a company like this will charge.

Debt consolidation companies offer loans to pay off debts all at once. People will often get drawn in by promises of a low-interest loan, but once they’ve gone through the application process, they’ll find higher fees. Depending on the situation, some people may also be able to consolidate and pay off debt through a second mortgage or home equity line of credit but be very careful as this requires the home to be used as collateral. 

Credit repair companies promise to clean up credit reports for a fee, but the chances that they can do anything account owners couldn’t do on their own are slim. You have the right to correct inaccurate information in your file, but nobody can remove accurate negative information.

People are often vulnerable to promises to fast solutions when worried about debt. Here are some red flags to help avoid companies with questionable practices. 

• Fees are charged before your debts are settled
• Additional pressure to pay fees masquerading as “contributions.”
• The company tries to look like a government program
• “Guarantees” to make the debt go away or improve a credit score quickly
• You are told to stop paying debts and communicating with creditors
• You can’t get additional information without providing personal financial information
• Promises about what they can do without actually reviewing the financial situation
• The company offers a Debt Management Plan without teaching budgeting and money management
• Promises that the company can erase bad credit or remove information from your credit reports

Before signing up for any program, research the business. Check for a BBB Business Profile and read the complaints and customer reviews filed against the company at BBB.org. Go to the for additional information on ways you can work with creditors and credit bureaus to earn a better credit rating.

In the US, you have rights protected by the Credit Repair Organization Act (CROA), enforced by the FTC. Legitimate companies adhering to the Act must provide the following:

• A written contract detailing your rights and the services to be performed
• A three-day cancellation period with no charges
• Details on how long it will take for you to get results
• An accounting of all costs and fees
• Any guarantees that they are making through their marketing

If you feel you’ve been taken advantage of by one of these companies, report them to your local consumer affairs office or state’s Attorney General. You can also file a complaint with the FTC or call 1-877-FTC-HELP. The FTC may not be able to resolve individual issues; however, they can act if there is a pattern of complaints or possible violations.