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Advice you need to cancel contract with a shady company

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Mark Cappel
UpdatedMar 20, 2009

I signed a contract for this company that said that was going to help us find government jobs, but were a scam. What do I do?

My husband and I signed a contract for this company that said that was going to help us find government jobs and send us to school. Recently they have been sending us bills when they are already passed due, and charge us 100 dollars when we're only supposed to pay 50 a month. I am currently unemployed, recently lost my job and I don't know how I'm gonna make it. I asked them if I could cancel my contract and I was willing to pay the cost, but they say they cant do that because it's too late. I don't know what to do because nobody could help me out because we don't owe that much but we owe close to 2000 dollars and with two kids and both of us laid off, and me going to school that's a lot of money for me. What do you think I should do? The truth is they haven't helped us at all to find jobs and they just expect us to pay them for receiving no help at all.

The first step I would advise in your situation is to contact the Legal Aid Society or Legal Services in your area to inquire about legal representation. I mention these two services because they charge fees based on a sliding scale according to your income. Since you just lost your job, you likely cannot afford the retainer fee charged by most private attorneys. If you can find a listing under either of these two agencies, or both, a call to ask for an appointment with one of their attorneys will be a good first step. You will explain to the attorney the nature of the problem, just as you have written here. Take a copy of the contract with this company and your attorney should be able to take it from there. Many attorneys will handle this in the simplest, most direct manner; the attorney will send a letter stating that the company has performed no service requiring payment. In addition, the attorney may state that your loss of income has made the contract impossible to perform so that you must rescind the contract. The letter alone should convince the company to stop its demands and close the matter entirely.

If you cannot find Legal Aid, Legal Services, or similar organization in your area which offers reduced cost legal representation, you should contact your state or county Bar Association to explain the situation and request a referral to an attorney who can assist you. Most bar associations will provide you with a free or low-cost consultation with one of their member attorneys; during the consultation, you and the attorney can discuss representation and the potential costs involved. If all you want the attorney to do for you is to render an opinion about the validity of the contract and draft a letter to the company, your costs should be minimal. I strongly recommend the use of an attorney to represent you, at least in sending a letter to the company, because this is exactly the approach that I have seen make an end to murky contractual messes like the one in which you have landed.

It is these kinds of services found all over the internet (and, of course, marketed every other way), with programs appealing to people who have usually just suffered a loss of employment, divorce or any other event leading to a financial turmoil, that tend to fold quietly when confronted. A letter from your attorney, who would know how to alert the responsible regulatory agencies to investigate this company, increases that probability of the matter being resolved in your favor. I would never presume to predict the proper steps for your attorney to take, but I would like to describe what you might look for to finalize the matter after the company agrees to cancellation of the contract. You should expect a settlement letter rescinding the contract and relieving both sides, that is, you and the company, from any further performance under the contract. The settlement letter might include, among other elements:

  • a mutual release which would bar either party from suing the other for any act or failure to act occurring on or before the date of the settlement letter
  • that the company will reimburse the actual fees paid to your attorney, since they improperly forced you to obtain representation
  • a promise that the company will not report any default in payment on the contract to any credit reporting agency.

You might be prepared that all may not go as smoothly as I have advised here, but your attorney will be able to explain any problems as they arise. However, I think it much more likely that this company will agree to cancel your agreement without further conflict. If the company does create any additional problems for you, your attorney may recommend that you file a complaint with your state Attorney General’s office and with the Federal Trade Commission. These agencies, especially your state’s Attorney General, should give added weight to your position, as no company wants to be scrutinized by these investigative agencies, especially when engaging in questionable business practices.

I wish you the best of luck in resolving this matter.

I hope this information helps you Find. Learn & Save.



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BBen, Aug, 2009
When cancelling contracts via email make sure you use a free service to certify your cancellation.
BBill, Apr, 2009
All debt settlement companies charge fees for their services. Reputable firms will spread the fees to be part of the monthly payment for up to the first 19 months in the program so that clients can also save at the same time. The fees may be higher in the first three months. make sure that you have done your homework on the firm that you signed up with. Do your research online and on the BBB's website.
MMike Erickson, Apr, 2009
I have been with Consumer Legal Services America for 8 months their fees take about 80% of what I send them each month I hope I have not made a costly mistake choosing them as my Debt Settlement Program.