SmartStart Financial in Studio City, CA and New Foundation Processing in Irvine are scam operations that prey on the most financially vulnerable individuals by making promises of financial freedom at the same time as they are separating you from what money you have left.
Due to a job loss and legal fees from a custody dispute from a previous marriage, my current wife and I were in serious financial trouble in the Fall of 2010. We heard a guy named Ken Michaels talking about debt settlement on AM radio one morning and we were interested. So we called the number on his show and set up an appointment to talk to someone from SmartStart Financial, 12400 Ventura BLVD, #627, Studio City, CA 91604. (1-888-310-7558). We ended up talking with Gabe Jasso (who no longer works there, go figure).
We talked on the phone several times and his plan sounded good but it sounded too good. My wife and I were already going to be in California for a vacation planned before the financial problems came up so we decided to meet Gabe face to face and see if this program was legitimate.
We met in late July. Gabe seemed like a good guy. He convinced us of his integrity and the integrity of his company and easily overcame all of our objections with well rehearsed pat answers. We asked questions about fees, creditor phone calls, and our credit score.
Gabe told us that if we signed with him, his legal team would get right to work and the creditor phone calls would stop within a few weeks. He said that as the debts were paid, our credit score would improve. And then there were the fees.
According to the contract, in very small print, it stated that the fees were 7% of the total debt owed. When I asked him about this, he left the room to do some calculations, came back and told me that $75 would be deducted from my monthly payment for the duration of the program. When I asked him about the part in the contract that stated that this amount (about $8000) in my case would be paid up front, he restated $75/month. So we signed.
I started paying $560/month and after three months, checked my balance on the New Foundation Processing Website and I had a $92 balance. I had paid them $1680 and I had a $92 balance. Huge sirens were going off. Meanwhile, I was getting called sometimes 10 times a day from a single creditor. And I had three. So I called New Foundation Processing who was now the manager of my program.
The rep informed that not only do they take all the fees up front, but they don't make a single phone call until your fees are paid and you have substantial savings built up. He said that they may not call a single creditor for 6-18 months. Meanwhile, your credit rating continues to decline and your debts end up being charged off and sent to collection agencies. The agent's solution, change my phone number.
I immediately cancelled my program and asked for a refund of everything I paid. I declared that I was a victim of deceptive business practices and was entitled to a refund of all my fees. Since they have done absolutely nothing for me, they certainly didn't earn the money. I filed my request in writing on October 28 and they kept me dangling for 2 ½ months. They finally denied my request saying that I signed the contract. I asked to speak with a manager, Louis Kearney. He said he would call me back immediately and he failed to call me back at all.
Let me make this perfectly clear.
This is a scam.
SmartStart Financial, Ken Michaels, and New Foundation Processing are scam organizations that prey on those who are looking for help out of their financial situation. They are ripping off the people who can least afford it.
Do not enter into any debt settlement agreements with these companies.
If you do, you will regret it!
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