If you read this blog on a regular basis, you know I frequently write about the debt elimination scam. I’m usually coming at it from the angle that companies offering these services are fraudulent. The owners know they are ripping people off by selling a system that simply doesn’t work. But every once in a while I hear from someone who’s not trying to sell debt elimination as a service. They write as individuals, true believers in what I call the “conspiracy theory of global finance.”
The tendency to believe in conspiracies is rampant in our society. The Kennedy assassination, fluoridated water, UFO phenomena, the 9/11 attacks, vaccines — these subjects have all been the focus of conspiracy-minded individuals, some of whom are obvious candidates for the “tin-foil hat” award. I guess aluminum foil is supposedly pretty effective at blocking alien mind-control signals… ?
One of the most popular areas for conspiracy-mongering has been the global financial system. Some of the theories are overtly anti-Semitic, blaming Jews for all the financial evils in the world, while other are more subtle in their rhetoric. The bizarre legal and financial theories behind the debt elimination movement are in the latter category.
It’s all about the secret wheeling and dealing that happened in the early decades of the 20th century and resulted in the establishment of the Federal Reserve system and fractional reserve banking in general. Once you believe that the core financial system of world commerce is an insidious scam – you know, the system that has helped lift the living standard of billions of human beings around the world — then all remaining logic and critical thinking goes right out the window.
What follows is a classic example, starting with an opening email salvo from my new cyber pen-pal (name changed for privacy):
“Hello,
I came across your website and found it interesting, however it is grossly misinformed. I have personally discharged over $40,000 worth of unsecured debt using the exact methods you claim to be fraudulent.
I did this using the FDCPA regulations, a couple of simple letters, and information found in the book “Modern Money Mechanics.” Banks actually commit fraud when “loaning” money in several ways. One way is that a bank leads people to believe there is an actual loan made in acquiring a credit card or student “loan”, when in fact the money is created out of thin air by making an entry into a computer. Furthermore, the money that is created is entered as a CREDIT in the person’s name.. which is in capital letters. This is known in Black’s Law Dictionary as the Strawman.
The fact of the matter is that the entire credit industry IS operating fraudulently. When you research it as I have over the past three years, just HOW fraudulent is absolutely mind boggling. I realize as I write this that you have a vested interest in NOT telling people the truth, or perhaps even wanting to know it yourself because it would effectively put you out of business. However the fact remains that you are telling people blatant lies out of ignorance.
Were you to do some research and discover the truth for yourself, you might then work for real justice in the world, and perhaps change your product and service to something which is based in Truth rather than that which is perpetuating a myth and which is harming everyone.
In the meantime, you might find a couple of movies intersting (sic) :
“The Money Masters” – available on YouTube or DVD.
“Money As Debt” – Available on YouTube also.
If you would like copies of the actual letters I used please let me know and I will be happy to forward them to you.Sincerely,
Allen”
OK, so in his very first email message to me this tactful fellow accuses me of being grossly misinformed, having a vested interest in deceiving the public, and telling blatant lies out of ignorance. Nice way to start off a dialogue with a total stranger, right?
Now, I have a confession to make. I actually enjoy sparring with these folks. It’s pretty sick, I admit it, but it’s a form of amusement and entertainment for me, what can I say. My first reaction was to launch into attack mode, but I figured I would give this guy the benefit of the doubt first. Here’s my reply:
“Allen,
You are “grossly misinformed” about my supposed lack of knowledge of the system you are such a fan of, but I don’t have time to debate with you. I’m too busy helping people who have been ripped off by “crusaders for justice” like yourself, who told them they could legally walk away from their debt obligations with no consequences, only to find they got laughed out of court, lost their cases, and started seeing wage garnishments.
Extraordinary claims require extraordinary proof. Please tell me the name/county of the court where your cases were heard, along with the civil case docket numbers. Don’t send me any documents directly, please. Only documents that I can retrieve directly from the court will meet the standard of evidence required here. Let’s have the case citation(s) where a judge ruled in your favor on the basis of the “no money lent” argument.
Sincerely,
Charles J. Phelan
President/Founder
Manchester Publishing Company, Inc.”
This is my standard technique for dealing with “experts” who write to me, tell me how full of baloney I am on this particular subject, and then claim they were successful using the techniques I warn consumers against. My first response is always the same. “Prove it.” Give me the documents, *court* documents where a real-life judge pounded the gavel and agreed with your cockamamie legal theory that “no money was lent” by the creditors. I’ve been asking for proof for nearly a decade. I’m still waiting.
So how did he reply? By backing up his mental dumpster and unloading it in my email inbox:
“Actually I’m not a fan of a fraudulent system that takes advantage of others, which is why I work to bring it down rather than to support it by buying into the lies.
I didn’t go to court on any of the cards that I got charged off.. which was every one of them. Contrary to what most people believe, it’s actually quite easy to do because the banks don’t WANT to go to court, or their little scam would be revealed and a finding against them would set a legal precedent that bring the whole house of cards down around the world.
All I did to accomplish that was exactly as I said in the earlier email. I challenged the banks for fraud on the contract and fraudulent conveyence (sic) and the debts were charged off for the following reasons:
1. There is NO legal and binding contract.. only a promisory (sic) note which creates the funds to discharge.
2. There is NO disclosure of the actual accounting procedures. If there were the banks would be forced to tell people that the monies created were created as a CREDIT to the account of the Strawman, and NOT a debit. This means that the individual has legal right to the monies from the start and is under no obligation to pay them back.
They entire system is a scam that originally began in 1913 and was subsequently pushed through Congress a few years later. When done correctly the FDCPA, and the FCRA can easily be used to get an unsecured line of “credit” charged off. It is also possible to obtain the remainder of the monies in a given account in cash. As I said, the money was assigned as a credit and not a debit to the individual and is therefore legally ours to begin with.
As I said earlier, if you want to know more, watch “The Money Masters”, “Money as Debt”, and read “The Creature From Jeckyl (sic) Island”. That will bring you up to speed on what the World Bank and the Federal Reserve is REALLY up to.
In closing, I’m sure there are idiots out there who scam people. In fact I recently read about one in Florida who took thousands and never did the work promised. But that there are idiots in every walk of life, and a few bad seeds don’t change the fact that what I am saying is true. If you want, I’ve given you enough information that you can find out for yourself. And as I said, once you do, I can provide you with the necessary tools if you decide you want to alter your course a little.. and I won’t charge you a penny.”
OK, so where do I start? This is so wrong on so many levels that it’s difficult to know where to begin. But let’s begin with the obvious. No legal paperwork. All this person accomplished was to get their debts charged off. Um, hello? That happens automatically! Don’t pay a credit card bill for six months, and voila, charge-off time. A charge-off just means the creditor records the loss on their books. It doesn’t mean they will stop trying to collect afterwards.
Anyway, I was getting a bit annoyed with this chap’s self-satisfied smug tone, so I decided to let him have it with both barrels.
“Allen,
Listen carefully, please. Both your emails were very insulting in tone and approach. You’re writing to a professional, not some clueless newbie. I do this for a living. I’ve seen it all, every trick in the book. I have been aware of everything you are describing for a decade or more and know a hell of a lot more about it than you apparently do. You’re just another in a long line of people who thinks he has discovered some big conspiracy, and can’t resist emailing me to tell me how wrong I am. What a laugh. I read Jekyll Island years ago. It’s complete crap from start to finish. Griffin is a John Birch whack-job, and his book was thoroughly debunked by legitimate scholars long ago. That’s as deep as your “research” went? Griffin? LOL.
If you don’t have court cases ruling in your favor, then all you did was temporarily chase away some collection agencies via the various documents utilized by the monetary protest crowd. Creditors drop cases all the time, or choose not to sue, for a variety of reasons that have absolutely nothing to do with what you think it does. You, like everyone else tilting at windmills out there, are completely clueless about what a pile of bulls**t you have chosen to put your faith in. You apparently don’t even understand what a charge-off is! You didn’t “get” your creditors to record charge-offs. That happens automatically. You’ll get sued sooner or later by a debt purchaser, or two, or three. If you enjoy the legal fight, bully for you. But 99% of consumers don’t want to go that route.
Did you, or did you not, purchase goods and services to the tune of $40,000 via the credit cards? Are you saying you received NO value whatsoever from the purchases made with the credit you claim was illegal? If you had not had those credit cards, how would you have obtained those $40k worth of goods or services? Don’t you understand what “consideration” means in the context of a business transaction? From my perspective, all you did was stiff your creditors to the tune of $40k. But that apparently does not conflict in any way with your values or ethics. Sorry. Call me old-fashioned, but I’ll side with the OCC, FTC, and every single state AG out there, and continue to advise consumers to steer clear of conspiracy-theory-based techniques that simply do not work for the vast majority of people who attempt to implement them. I’ll continue to do what I know DOES work — good faith negotiation and settlement. If you want to preach otherwise, get your own website.
Sincerely,
Charles J. Phelan
President/Founder
Manchester Publishing Company, Inc.”
A little harsh, perhaps, but hey, he started it, right? (You have to give as good as you get sometimes with people who are a bit thick in the skull.) His response?
“My apologies if I was coming off like I was being condescending.. I wasn’t. As with you, I am a professional and hold two degrees.. one in Electrical Engineering and a Doctorate in Philosophy.. so obviously I didn’t just fall off the potato truck.
My only intent from the start was to inform you of the truth, not to try and make you believe it. I’ve researched this for over three years, and the information I have portrayed /is/ accurate. However, you are certainly entitled to believe that Jeckyl (sic) Island isn’t true, or that the system we are living with is ethical and in integrity. The choice is entirely yours.
Please don’t bother responding, no further dialog on the subject is necessary or desired.
The best,
Allen”
Translation: “Gosh, you hurt my feelings. I don’t want to play anymore.” So there ends the exchange, which is too bad, because I was having so much fun. You’ll notice, however, that he failed to answer a single relevant question that I raised. “I know I’m right, and you can’t confuse me with facts to the contrary.” That was the essence of his defense. Our monetary system is a scam, therefore I never spent any real money, blah, blah, blah.
The core point I was trying to get across to this person was the concept of business “consideration.” I focused on that because someone who has two college degrees really should know better (not to mention they should also be able to spell better). How can you study Philosophy, obtain a PhD, and not understand basic logic? The debt elimination promoters often rely on the assertion that no consideration was received by the debtor because the creditor was not out any of their own actual money. Baloney! You can read the linked Wikipedia entry on consideration for further detail, but the core idea is that in a business contractual situation, consideration must be involved for it to be a valid contract, where consideration is defined as value paid in exchange for a promise. Simple enough.
By arguing that no value is received by the debtor because the bank is extending credit and not loaning money directly, the true believer in debt elimination is overlooking basic reality. When you use a credit card to purchase goods or services at a retailer or other business, the mere fact that you had the convenience of using credit constitutes consideration. Look at it this way. If you did NOT have a credit card, you’d have to write a physical check or pay in full with cash, right? Because the creditor extended you a credit facility in the form of that little piece of plastic, you didn’t need to pony up money out of your bank account to pay for the item. That fact alone means you were extended consideration in the transaction, because otherwise you would not have been able to conclude the transaction under such convenient terms and would have had to directly negotiate credit terms with the merchant. So this blows away any and all objections by the debt eliminator that no consideration is involved. Crash. Down comes the whole kooky house of cards.
Anyway, all this person accomplished was to rip off his creditors for $40,000, *temporarily*. Since he never resolved anything, and thinks that the process stops with charge-offs (which is actually when the collection process just starts kicking into a high gear that can last for *years* to come), he will be exposed to multiple lawsuits in the coming months and years. This is my beef with all such mumbo-jumbo “magic bullet” techniques. They never result in any of the debts actually getting resolved in a final manner. A debt settlement letter accomplishes that resolution. You pay X dollars by such-and-such a date, and you’re done, period. And you have it IN WRITING FROM THE CREDITOR. Game over. On to the next debt, etc.
I doubt the above will convince a true believer. But I figured I would go ahead and post this exchange for its educational value. If I can spare one consumer from falling into the insidious trap set by the scam artists who sell these bogus “programs” for thousands of dollars, then I’m happy to keep sparring with true believers in the conspiracy theory of global finance. Anybody else out there want to take a shot at convincing me I’m wrong on this subject? 🙂
Charles, the exchange was fun, if long with Leo. Though
I find that you were by far the more clear writer (Leo needs to
learn the value of paragraphs and spell-checking), I was most
pleased by your final response to Leo in which you seem to give
him a bit of due credence, if only on a theoretical basis.
After all, one can hardly dismiss the fact that the Fed does
represent a huge conspiracy. The elasticity they practice and
control may have produced prosperous times since I’ve been on
the earth, but it most certainly has created some fine down
times as well. Have we inured to it so much that we cannot see
the chains of inflation it has saddled us with?
Now, does knowing this help eliminate any of my debts? Not in
any proven way that I’m aware.
I am going through your debt settlement program because I
believe you to be a clear and practical man. Your focus is not
on theories or pie-in-the-sky notions, just plain results. This
is what anyone should want in my situation; I certainly do.
I want to give Leo the general nod, however, that the Fed and
our money system have smelled things up pretty good. What this
private bank has done was well summarized by Thomas Jefferson
when he said “…first by inflation and then by deflation
[the central bank] will rob the people of all property….”
It would be trite of me to say (ala you Charles) that it only
matters, Leo, what the courts say. That is certainly
demonstrably true. Nevertheless, the honest answer from my
position is that I am so hand-tied with living paycheck to
paycheck that I know I could never muster the doggedness to
blaze a trail using an unproven technique in court. This, even
though I might earnestly agree with it in spirit. Perhaps this
is precisely the desired result of the Fed, that we all be
sufficiently financially distracted so that we will
not arise in objection to it.
Reading the above debate was like trying to get in the middle of Andrew Jackson and Thomas Biddle at a bankers ball. I do have a couple of questions. When a credit card company(cc) sends me a card they never include a contract.Several months after you activate the card, you receive, sometimes, terms and conditions.I did a bit of research and found out you agree to thier terms when you first use their card.Is it not a legal requirement that full disclosure be made before there is a contract? They include in terms and conditions such items as they do not have to follow the rights of debtors given under UCC, a right of restrictive endorsement. It order for debtor to lose their UCC rights, do they not have to say read this, sign here? How then do the ccs have a contract? When you purchased your washing machine and gave the store your cc, they gave an entry to the store and a debt entry to you.At that time no money exchanced hands.The merchant is happy and now the cc says we need your labor to square our books.( income) Lets say you get hit by lightening and are a vegetable the rest of your life and can never pay.(you have no assets and the lightening hit your washingmachine too) Does the cc lose anything? Their books lose a debit entry,they have no monentary loss.Their bank created an entry to satisify thestore who delivered the washing machine, Where was the risk to the cc? Does not a contract require that ther be risk involved in all contracts if not performed by both parties? Thirdly, the argument can go on forever about the Federal Reserve, private,government owned,thin air money vs gold etc. Is not the CC a corporation created by the state? How and when did this corporate cc become exempt from the Constutition? They were not given by congress the power to create vapor money as the Federal Reserve does. What makes the cc exempt from Article 1 Sec 8 ? I know that Treasury printed greenbacks for Lincoln etc, and the Federal Reserve was supposed to maintain the value of the dollar with an elastic currency.When were the banks given the power to create and loan credit and charge interest on it? Perhaps I missed the Constutional ammendment? Lets just say you ask your friendly cc the above questions and swear an afivadat, and ask them to answer these questions? certified mail or by service.Will they answer these questions? I know I must be stupid to ask, but does not contract law require the above to be a contract, especially when there is no written contract signed by both parties? What happens if you send this affidavit and the cc refuse to respond to your silly questions?Does not the UCC cover all commercial contracts as adopted by all 50 states? It states that an unanswered affidavit is the same as stating the truth of the affidavit.Are the cc exempt from the UCC? If so when did this occur? I would appreciate an answer to above questions as I am trying to figure out weather to side with Biddle or Jackson. Thank you [email protected]
Here we go again, folks! Yet another Don Quixote arrives to lecture us on the fine art of tilting at windmills, in the guise of “questions” to which he already knows the answers (or thinks he does). Tony, it’s totally obvious that you already side with the monetary protestors, so please stop pretending that you are trying to be objective. I have zero interest in another one of these debates, so let’s strip away the chatter about UCC, contract law, the Federal Reserve, the Constitution, etc., and get right down to the crux of the matter. You believe “no money exchanged hands” when I used the credit card to purchase the washing machine. You are mistaken. Money did change hands. We just have very different definitions as to what constitutes money! But I see little point in further debate on the subject. You’re welcome to believe either Jackson or Biddle, and I personally don’t care either way. Believe whatever you like, but it won’t make one bit of difference in court. Go ahead and see for yourself. Rack up a bunch of debt on your credit cards and don’t make any payments. Wait until all your creditors sue you, then go to court and test your theory that credit card contracts are invalid. Let me know how you do. 🙂