How to get a refund from a debt relief company

I’ve been helping people get out of debt since 1994, and getting back from a debt settlement company that you think wronged you is one of the most common things I’m asked. Here’s my definitive guide on how to do it – step by step.

Fair warning: it takes some effort. But the process works. A debt settlement company president once said that the steps in this guide “represent a consumer dropping a nuclear bomb on any company.” That’s the point.

“The steps mentioned here should represent a consumer dropping a ‘nuclear bomb’ on a company.” — President of the debt settlement company, about this guide

And from a reader who used it:

“Thanks to Steve and GetOutOfDebt, we were able to recover enough to pay our bankruptcy attorney, leaving about $3,500 in the hands of the company we trusted. Looking back, they caved quite easily and didn’t want us to continue writing the letter to the FTC, two attorneys general, and others. I probably could have pushed for more. Steve, I can’t say this enough. The education you provide is of the utmost value to people like us. All of us.” – Gymdez

I’m starting from the assumption that you are in a debt relief program – or have paid for a service – that has provided little or no benefit, and you want to get out and get your money back.

A reasonable process for refund requests

Keep an eye on each stage below. Buy a shoebox, a folder, or a special drawer and throw all the documentation in there as things develop: copies of letters you send, delivery receipts, their responses, everything.

Step 1 — Start simple

Call or email the company first. Give them a real chance to make things right. Many companies will resolve legitimate complaints quickly if asked directly.

If they respond quickly and satisfactorily, you’re done. Problem solved.

If they reject you, ignore you, or offer something unreasonable, go to step 2.

Step 2 — Get Organized

Now you need to document everything. Set up your shoe box or folder. You collect:

• Copies of every letter you send
• Registered mail receipt cards (green cards or electronic confirmations)
• Their written or email responses
• A written log of each phone call (date, who you spoke to, what was said)
• Printed copies of any online complaint acknowledgments

Organization is your leverage. When regulators or a small claims judge see a tidy paper trail, it makes the company look bad and you appear credible.

Step 3 — Send the certified letter

This is the crucial step. You must send a physical letter registered mail, return receipt requested. The return receipt (the green card, or its electronic equivalent) proves who received it, who signed for it and when. Don’t lose it: it goes in your box.

Keep a cool head in your letter. No threats, no profanity – just facts and a clear request. Involve:

• A factual description of your complaint
• A statement that you want to leave the program
• The specific refund amount you expect
• A deadline: give them at least two weeks to respond

Then comes the part that gets the attention. Tell them that if you cannot reach a mutually acceptable solution, you plan to file a complaint with the following:

1. Consumer Financial Protection Bureau (CFPB) — file a complaint here
2. Your State Attorney General’s Office — Find your AG here
3. The Better Business Bureau — file a complaint here
4. Your local consumer affairs office in the province – search for your province online
5. The Federal Trade Commission — file a complaint here
6. Any professional association to which the company belongs
7. The news department of your local TV station(s)
8. The state association — if the company is a law firm or is managed by a lawyer. Lawyers are officers of the court and are subject to disciplinary action, up to and including loss of license, for failure to adhere to ethical standards.
9. The escrow provider — if your money is in a third party escrow account, send a copy directly to them
10. United States Postal Inspection Service — if you have received deceptive material via US mail. Call (888) 877-7644 or submit online
11. FBI Internet Crime Complaint Center (IC3) — if the scam originated online. File at ic3.gov
12. GetOutOfDebt.org – file a scam report here

Step 4 — Protect your money

Contact your bank and ask how you can stop future charges from this company. They may tell you that you need to change your bank account number. Yes, it’s a pain, but it stops the bleeding.

Before you do thisRead the refund section of your customer agreement. Some contracts say that stopping payments will void your right to a refund. Know what you are agreeing to before you act.

If your money is in an escrow account, contact the escrow company directly. Tell them you want a full refund and that you want to close your account, but only if that doesn’t affect your ability to get a refund from the company you’re in dispute with.

Step 5 — Be patient and keep records

Save everything from this point on. Print emails. Record every phone call: date, name, summary. Every piece of paper or electronic communication goes into your box.

This is the boring part. Do it anyway. Documentation is what wins in small claims court and what regulators want to see.

Step 6 – Continue what you said

If the company doesn’t respond by your deadline, do exactly what you said you would do. Submit the complaints.

This is where many people quit – and where companies count on you to quit. Don’t. You set a deadline in writing. Honor it. Filing these complaints is what separates people who get refunds from those who don’t.

Step 7A — They offer a partial refund

If the company responds with a partial refund offer that feels fair, you can accept it, but read it carefully before signing anything.

Some companies add a non-disparagement clause or ask you to waive further claims. Only you can decide if that transaction is worth it. If you are unsure what rights you may be giving up, consult with a consumer advocate attorney before accepting.

Step 7B — Their response is unacceptable (or they don’t respond)

Submit any complaints you mention in your letter. When sending complaints to these agencies by physical mail, include copies of your original letter and the receipt card showing that the company received the letter. Also send those complaint packages by registered mail.

If you are submitting online, print the confirmation screen before pressing Submit and save the confirmation email.

Step 8 — Keep the company informed

Send the Company copies of any complaint you file (as you file) by certified mail. Show them in real time that you are doing exactly what you said you would do.

Step 9 — Small Claims Court

If you have followed each step and still have not found an acceptable resolution, contact your local courthouse and request a filing in small claims court. Debt relief costs are generally within small claims limits.

Those documents you kept in your box? Take them all to court. A judge will see on one side a painstaking paper trail and a company that ignored a consumer – and your chances are good.

If the process feels overwhelming, find one local consumer advocate. Make sure they are licensed in your state.

What to expect

Most people who follow this process get a negotiated acceptable refund or a full refund, provided they file before the company files for bankruptcy or disappears. In my experience, debt relief companies that communicate poorly and deny reasonable requests often meet a bad end. Some file for bankruptcy. Some disappear overnight.

Don’t wait.

If you are still not satisfied after trying this process, you can file a scam report here. This helps alert others and creates another public record.