From the Too Good to Be True File

Feb 10

So is it the “real deal or too good to be true”?

From a Prudent Money listener:

I have received a phone call from a financial company – their website is www.silerfg.com They are claiming to reduce my interest rate on our credit cards debts to about 4% fixed rate for the life of the balance and also our mortgage interest rate from 6.5% to about 4% or 5% fixed rate by negotiating with the credit company and with the mortgage company. They will charge me about $1,400. I have asked them to send me a written statement showing what they are promising but they don’t want to send such a letter. They are also claiming that they got our name form the credit bureau because we have about $65,000 debt and we pay our bills on time and we have a good credit therefore this program is for people like us. They are also claiming that this won’t affect our credit in any way as we will keep paying our debt on time. The only thing they will do is lowering the interest rates on all of our credit cards and also on the mortgage. Please advise if there is such thing. Is this is too good to be true?

Verdict – way too good to be true

I am not privy to the terms and conditions that give the disclaimers to the claims being made by this firm. The sad part is that neither is the listener that they are pitching. I can tell you a few probabilities and a fact. There is a high probability that they cannot lower credit card rates as promised. In this environment, it isn’t happening. There is a high probability that they cannot get a mortgage rate negotiated down. Mortgage companies are struggling to keep up with the home owners who are not making payments. Once again, it just isn’t a market where something like that is happening.

Fact – A credit card company is not going to lower your interest rates for life as a set contract without something negative happening to your credit.

Fact – A credit card company is not going to negotiate a rate for someone who has good credit and is always current. There is no incentive.

Fact – A credit card company is not going to give a guaranteed fixed rate when it is better business to stick with variable rates. The new credit card act is designed mainly for fixed type credit cards. This is why card companies are switching to variable. Plus it is a given that nothing is guaranteed when it comes to using credit cards.

Fact – A credit card company only lowers rates when there is a hardship. Creating a hardship would mean that the listener would all of the sudden have to become behind on their payments. That in itself would damage the credit score.

Fact – A mortgage company is not going to give you a break unless you go through a refinance or the program designed to save you from foreclosure. If you qualify for that program, your credit would be greatly damaged.

The first red flag was that it was a solicitation from a marketing list. The second red flag was that they were promising something that by precedent only scammers could promise.

Finally, the last red flag was that they wouldn’t send their terms and conditions backing up their claim.

Marketers are getting even more aggressive and irresponsible with their marketing because of one big problem. Marketing is not as effective today because of the problem of an attention deficit. We are bombarded by information and solicitations like never before. It is tough for companies to get the right message to the right audience. Thus, they become sensational. It is important to take a stand against the too good to be true, investigate the claims, and resist doing business with anyone who markets this way.

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