Bamboozled: Still stuck with debt

Sharon Lemma Bozza charged her way to big-time debt.BB branding

When she and her husband split in 2003, the money troubles began. She received child support for their three children, but it wasn’t enough.

“I continued to work a full-time job, but things were so tight I began to go into debt, not for luxury items, but for basic things like food and clothing,” said Bozza, 46, of Nutley.

Nearly $60,000 in debt and 12 delinquent credit cards later, Bozza decided to get help. In July 2008, she found Texas-based American Financial Concepts (AFC), a debt-settlement company that promised to negotiate lower payoffs for her debt.

It didn’t exactly work out that way, and by the time she was through, Bozza was sued by creditors and she was out thousands of dollars in fees to AFC with nothing to show for it.

3910Most of Bozza’s communications with AFC, including contract signings, were via e-mail. She said reps were friendly, supportive and encouraging. She signed on for a 48-month deal, agreeing to give AFC limited power of attorney to contact her creditors to negotiate debt settlement plans.

Here was the deal: Bozza would deposit money into a bank account from which AFC would take its fees. Eventually, she’d pay the negotiated debts from that account. After 48 months, she should be debt-free — as long as AFC could negotiate good deals and as long as she kept paying.

On Aug. 11, 2008, AFC took its first of four monthly fees of $733 from the account. Those would be followed by 18 payments of $310. All fees to AFC, no debts paid yet.

“I began to work three part-time jobs,” Bozza said. “The extra money I was bringing in was going toward paying the debt settlement company, with complete confidence that after my four-year plan, I would have paid off everything.”

She continued to receive bills and collection notices. Each time, she’d send a note to the creditor explaining AFC was representing her, and she’d send a copy of the bill to AFC, she said.

Time passed. AFC kept collecting its fees, but it didn’t seem to be doing much about her debt, she said.

In March 2009, Bozza asked representatives if she could start paying down debt. Despite her requests, AFC wouldn’t discuss negotiation results via e-mail.

So she called.

“They said they had negotiated two bills about $200 less, and they recommended I not take those settlement offers because they weren’t low enough,” Bozza said. “None of the big bills were ever negotiated.”

That same month, Bozza was sued by Target National Bank, one of the lenders AFC was supposed to negotiate with, over her unpaid $2,000 credit card bill.

That was the last straw. Bozza ended her payments to AFC, out more than $4,400 and now in worse shape with her creditors than before.

Bamboozled did some digging.


There are six complaints against AFC with the Texas Attorney General’s Office, and the New Jersey AG said it had one complaint — from Bozza.

We contacted AFC about Bozza’s experience.

“AFC provides the services to its clients which are contracted for, and in Ms. Bozza’s case this included obtaining substantially discounted settlement offers,” an unnamed AFC representative said in an e-mail.

Bozza said there were only two settlement offers. AFC said there were more, and it produced a long list of contacts it said the company had with Bozza’s creditors, including negotiated settlement offers, dates and contact information.

Bozza said she was never told about these offers, so we asked her to call the creditors directly to see if their records matched those presented by AFC.

Bozza started with a Citi card on which she owed more than $23,000. AFC records said that on Feb. 3, 2009, it negotiated a payoff of $10,530, called Bozza at home and left a message on her cell phone. It said it renegotiated on April 13, 2009, for a settlement of $9,503.

But not according to Citi, she said.

“(Citi) had no indication that there were ever, ever any figures talked about, nothing broken down or offered on the account,” Bozza said, adding the account was sent to a collections company.

She then contacted her Chase card, to which she owed more than $20,000. It, too, had no record of negotiations with AFC, she said, although it had been notified the company would be her debt-settlement firm.

At Sears, there was no record of contact by AFC, Bozza said.

We asked AFC to explain.

“I don’t have an explanation as to why Ms. Bozza would say that she wasn’t notified by AFC of the settlement offers,” AFC representative Joel Knapp said in an e-mail. “As you can see from the documentation, she was contacted with each settlement offer.”

Knapp suggested perhaps Citi did not have access to negotiations that took place between AFC and a collection agency, Academy Collections.

Maybe, but something doesn’t add up.

Bozza was paying AFC to negotiate settlement offers. If the company negotiated with collections agencies rather than directly with the creditors — and settlement offers were reached — why would Bozza say she was never told? Why would three of Bozza’s creditors tell her they have no record of the deals, and why did two of the three have no record of AFC at all?

“AFC takes seriously its reputation for customer satisfaction and its reputation in the business community,’’ the company said.

If that’s the case, AFC should return the fees it collected from Bozza so she can use the funds to get rid of that debt.


Understand how debt settlement companies work. You agree to set aside funds, and before money goes to creditors, the settlement company takes its fees. (Had Bozza stuck with the AFC program, she would have paid a total of $8,500.)

While you’re banking this money to pay your debts (and the fees), you’re supposed to send all correspondence from your creditors to the settlement company, which suggests the settlement company is making calls on your behalf. Some do call, but others wait months if not years before negotiating your debt.

At worst, you’re getting absolutely nothing for your money. At best, the settlement company negotiates your debt, but this is something you could do on your own, for free. In fact, some lenders refuse to deal with settlement companies at all, in which case you’re paying for nothing.

Instead, call your creditors and try to negotiate on your own. If you need help, rather than a settlement company, find a reputable credit counselor. Start with the National Foundation for Credit Counseling (

If you’re working with a debt-settlement company and you’re not happy, file complaints with the Federal Trade Commission (, the attorney general’s office (, the attorney general’s office in the state where the company is based and the Better Business Bureau ( These organizations, if there are enough complaints, may take action against the company.

Bozza complained to all those agencies, but it wasn’t enough. She plans to file for bankruptcy this month.

“I was trying to do the right thing, and in the end I was taken total advantage of by a company who thought nothing of taking my money for their own gain and leaving me and I am sure many others in worse financial crisis than before,” she said.