BEWARE The Free CD!

A couple years ago one of my readers asked me if I offered any sort of personal consultations or personal coaching.

Since I did not, his next question was, “if I were to offer such a program how much would I charge?” and he was insistent that I give him an answer.

I thought this was kind of strange but I soon discovered that one of the biggest names in the debt education business was trying to sell him on a personal coaching/education program.

He was trying to judge whether or not the price the other guy was asking was fair.

I was shocked, saddened, and disgusted to learn that the other guy’s “education” program was being sold for upwards of $10,000.

They accepted credit cards for payment and if you didn't have room on one of your credit cards for one $10,000 charge, they would be happy to divide up the $10,000 amongst as many credit cards as you needed.

In other words they would put $1000 on card one, $3000 on card two, $4000 on card three, and $2000 on card four if that is what you needed.

Now don't get me wrong.  I'm all for making a profit.  I am an information marketer.  I sell educational material to folks who want to improve their financial situation.

What particularly disgusts me about the approach I just described though is that they get you into the trap by using “get out of debt” as the bait.  Here is how it works:

If you spend any time at all listening to the radio you've no doubt heard the advertisements for a get out of debt program.  They include two or three testimonials from people who've used it as well and were happy with it.

So far, so good.

If you were to call that number, they would try to get you to buy their get out of debt program.  The cost for this is somewhere between $50 and $100 last I knew.

No problem yet…all smart business tactics.

However, what I've learned from several of my students is that the next step in the sales process is a hard sell for that $7095-$14,995 educational program.

Here is an email I got from Linda about her experience…

"I invested in (the $99 program) and got suckered into the
coaching program.  I doubled my credit card debt and basically have
nothing to show for it but bigger bills.

They sold me the coaching program before I even received the ($99)
materials.  There are three levels, 1 year for $14,955,  9 months for
$13,195, 6 months for $11,435 and 3 months for $7095.  They sell
youwhatever will fit on your credit cards, or they will finance it through
HSBC Bank of Nevada if you qualify.

I ended up with a 3 month program for $7095, which
(salesperson) hadfigured out and split up on the available
balances on three of my credit cards before I could blink, let alone think.

When I got off the phone that night and got a while to clear my mind, I felt
sick.

I wondered what in the world coaching could do for me that is
worth $7095.

I later read on the internet that when another guy
declined the coaching they berated him, saying he
didn't really want tosolve his problem, etc.

The coaching gave me nothing more than the original program
except he encouraged me to find a 2nd job or home business. They
guarantee me more calls that really don't help in any way."

Linda

* * *

What is particularly disturbing me about this is that they survey you about the amount of your debt AND how much “room” you have on your credit cards and push you toward the level you can "afford".

Here are some other reports I read in the internet:

Susan writes:
”I was stupid enough to call the 800 number from the infomercial that was played over and over on the radio with the man saying I paid off my 30-year mortgage in 2 and a half years. Wow. I believe I gave my credit card number for shipping the free tape that came along with over $500 of material I didn't want, never opened, and have been trying to return.

There was no packing list, invoice, or return address; only a card with another 800 number for a free coaching session. This coaching session turned out to be a high-pressure sales pitch for over $11,000 worth of coaching on how to get out of debt.

The velvet-voiced man kept me on the phone for over 2 hours, and finally convinced (distraught, vulnerable, broke single-mom) me to sign up for this. What was I thinking?? This has now ruined my credit and left me with more debt than I can repay.

It took 2 sessions to figure out I had made one of the biggest mistakes in my life. Now this program has piled hundreds of dollars onto my credit card and an $11,000 loan from some bank with 22.2% interest. Help!! How do I recover from something like this??”

Bob writes:
”When I spoke with a salesperson, I said If I give you my credit card number, I only agree to the shipping charge of between $4.00 and $5.00 Tthe answer was yes. I got some reading material and discs. There was a phone number to call if you had questions.

Of the three people I called and asked the question: How does an equity line of credit fit into this plan to reduce debt… Each answer was the same, I can't answer that but you will get the answer when you buy the total program. I made no further contract with them. I now learn that I am being charged 5 payments of $89.98 each month. This money was removed from my credit card account without my agreeing to it.”

Again, I’m all for free enterprise and making a profit but there is no way they can justify making people go $7095+ deeper into debt for "get out of debt" coaching.

Of course, they don’t call it “get out of debt” coaching they call it “education”.  They will teach you about investing, the stock market, budgeting, CDs and compound interest etc. etc. etc.

I’m quite certain these “coaches” are minimum wage employees who sit around waiting for the phone to ring with people asking questions.  The “answers” are likely in some big binder or computer program they use.

You could get a pretty good financial education at a local community college for a fraction of the $10,000 from people QUALIFIED to teach you.