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Susan Tompor: Hang up on robocalls promising to lower rates or fix credit | News



Consumers who are facing a cash crunch are once again warned to avoid paying upfront fees and falling for sure-fire guarantees when it comes to fixing their credit problems.

The Federal Trade Commission announced a string of actions in the past few months connected to student loan debt relief schemes, mortgage debt relief schemes and credit card repair scams.

In late July, for example, the FTC said it would be mailing 7,786 refund checks averaging about $293 each out of a settlement relating to robocalls and phony credit card rate reduction services. The refund checks will total nearly $2.3 million nationwide.

While the refund money is welcome, it just amounts to recouping 39% of the money that consumers lost to that one scheme, according to FTC data.

The refund checks should be deposited or cashed within 90 days. The FTC refund line can be contacted at 833-916-3597. The FTC noted that it never requires people to pay money or provide account information to cash a refund check.

How were consumers tricked?

The consumers often received a pitch via a robocall. The FTC warned in March 2020 that many of the robocalls preyed upon financial fears during the pandemic to “perpetrate scams or disseminate disinformation.”

The FTC and the Ohio Attorney General alleged that Educare Centre and Tripletel Inc. made false and unfounded promises that they would significantly reduce the interest rates on credit cards.

On top of that, the pitch included a 100% money-back guarantee if the promised rate reduction failed to materialize or if consumers were unhappy with results.

Two companies worked in tandem. The Canadian telecom provider Globex Telecom Inc., according to the complaint, made illegal robocalls to U.S. consumers to promote Educare’s phony rate reduction services. Both companies, according to the FTC, were run by Mohammed Souheil, a Canadian citizen.

In 2010, the FTC amended its Telemarketing Sales Rule to protect consumers seeking debt relief services, like debt settlement or credit counseling.

For-profit companies that sell these services over the telephone are prohibited from charging a fee before they actually settle or reduce a consumer’s debt. It also prohibits debt relief providers from making misrepresentations and requires that they disclose key information that consumers need in evaluating these services.

Economy recovered but budgets didn’t

The U.S. economy officially recovered from the shortest recession on record, which ran from March 2020 through April 2020, according to the National Bureau of Economic Research’s Business Cycle Dating Committee.

But many people haven’t seen their finances recover after losing jobs and trying to deal with debt. When people don’t have much in emergency savings, they’re more likely to take on extra debt when unexpected expenses hit, such as needing new tires for a car.

If you’re stressed out by too much debt, though, it can be too tempting to jump at the first cold call or TV commercial suggesting a way out.

Complaints about debt relief services and credit repair programs ranked No. 4 out of the top 10 pandemic-related problems disclosed to state and local consumer agencies in 2020, according to an annual survey by Consumer Federation of America. That category also included issues relating to mortgages, debt collection tactics and predatory lending.

Consumer watchdogs suggest that you first contact your creditor directly, if you’re having financial troubles. You may be able to arrange a payment plan yourself at no cost.

Or you can contact a nonprofit credit counseling service by going through the National Foundation for Credit Counseling at or by calling 800-388-2227.

In general, consumer watchdogs say you should avoid any debt relief company that charges an upfront fee before it settles your debt or has you enter into a debt management plan.

You also should avoid a debt relief organization — whether it’s credit counseling, debt settlement or any other service — that pressures you to make “voluntary contributions,” which can really be a way to cover up real fees, according to the FTC.

Red flags include talk of a so-called “new government program” that can bail you out of personal credit card debt or guarantees to make your unsecured debt simply go away.

You should not follow the advice of someone who says you must stop communicating with your creditors but doesn’t explain the serious consequences.

No one should, according to the FTC, promise that they can stop all debt collection calls and lawsuits.

Those burdened by student loans need to watch out

The FTC also warns that con artists target people who are overburdened by student loans, as well as credit cards.

“There’s nothing a student loan debt relief company can do for you that you can’t do for yourself for free. And some of the companies that promise relief are scams,” according to an FTC alert.

Scammers use official-looking names, seals and logos to impersonate the Department of Education. Some even go so far as to promise special access to repayment plans, new federal loan consolidations, or loan forgiveness programs. But, again, the FTC warns it’s a lie. If you have federal loans, go to the Department of Education directly at

Before you consolidate your student loans, find out what consolidating could mean for your situation. If you have private loans, the FTC says, talk to your lender. For federal loans, call the Department of Education student loan support center at 800-557-7394.

Another word of warning: Don’t give away important information about yourself, such as sharing your Federal Student Aid ID with anyone. Dishonest people could use that information to get into your account and steal your identity.

(Susan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at

©2021 Detroit Free Press. Distributed by Tribune Content Agency, LLC.

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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