The Elder Law Forum

The Elder Law Forum by Professor Michael Myers When the financial string of an older person on a limited, fixed income begins to unravel, the wolves are waiting. The pack includes clinics, hospitals, collection agencies, credit card companies, and now, scamming debt consolidation vendors.

"Mother was too embarrassed to tell us," said the USD Senior Legal Helpline caller (1-800-747-1895; mmyers@usd.edu). Her mother is 78, widowed, and living on a $1,050 monthly Social Security retirement benefit. It is her sole income. She lives in an apartment and has no car.

About 18 months ago, she sought treatment for an infection and high blood pressure. Her physician prescribed two drugs; one for life. She used a credit card to pay for the drugs. That is when her carefully-controlled budget began to unravel. With a 21 percent interest rate on her credit card debt, plus the ongoing cost of prescription drugs and physician visits, she soon fell behind on her payments.

"She responded to an advertisement by a one of those debt consolidation firms," said the daughter. Her mother began sending the company $150 per month, with the understanding that once it had received sufficient funds, it would confront her creditors with settlement offers. In the meantime, advised the company, she should tell no one about the arrangement.

The company assured her it would stand between her and the creditors and would serve as a shield. But the calls from creditors continued. A collection agency began to contact her by telephone and mail. She quit answering her phone and began losing sleep. In the meantime, she sent $750 to the debt consolidation company.

"I've tried to contact the company," said the caller. "They won't return my calls. I've contacted the consumer division of the attorney general's office. Is there anything else I can do? What about mother's indebtedness?"

I asked her to send me the name, address and telephone number of the company. If it is a legitimate company with assets, she may be able to retrieve her $750. If not, she is another victim of a scam targeting the elderly.

What about the medical bills? And the credit card debt? I volunteered to contact them and explain that her mother's sole income is from Social Security. I will remind them that Social Security benefits cannot be reached by creditors. I will tell them she is judgment proof. I will ask them to write-off the debt, or accept reduced payments.

"I wish mother would have told us about this earlier," said the caller. There are reputable debt consolidation firms in the marketplace. This appears not to be one of them. Family members should be alert to this type of fraud.

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