Dad Joke
I just invented a thought-controlled money printer.
I know it sounds crazy, but it makes cents when you think about it.
Now Let’s Make Your Money Smile
The “holding account” your money goes into might just be somebody’s checking account
Here’s the thing I’ve spent thirty years trying to get people to believe, and last week a state regulator wrote it down, at length and under signature, so I don’t have to.
On August 18, Connecticut’s Banking Commissioner issued a temporary cease and desist order against a debt relief outfit called CDS Debt Relief LLC, doing business as CDS Financial, along with David Lugo and Kevin Lugo. You can read the whole order yourself — it’s a PDF, it’s free, and nobody needs my permission to look at it. These are allegations. There’s a right to a hearing and no court has found liability.
But look at what the Department says it found in six months of one bank account. Roughly 1,569 payments came in from people around the country, about $488,751 of it. And in those same statements, the regulator says there is not one payoff of a consumer’s debt. Not one. What the statements do show, according to the order: $62,700 moved to David Lugo’s personal accounts, $95,008 in cash withdrawals, $113,100 to American Express, $32,216 to Discover, $3,311 to Capital One, and $8,143 to Toyota Financial for a car.
The Connecticut man whose complaint started it says he paid $1,000 a month for seven months — $7,000 — and got nothing. Then the collection calls started, from the very creditors his debt was supposedly enrolled with. When he called to ask what was happening, the order says the company hung up on him, repeatedly, and never answered an email. Another woman told the Better Business Bureau she’s “out $8,000.”
Now here’s the part I want you to actually take away, because it isn’t the outrage — it’s the paperwork. His contract said his payments were “transferred into a bank holding account on client’s behalf.” That sentence is doing enormous work. Connecticut law requires a licensed debt adjuster to keep a separate account for the benefit of debtors. The regulator says this money went into an ordinary operating account and straight back out again.
And CDS Financial, per the order, has never been licensed to do this work in Connecticut — or in any other state. Not one. That’s checkable, by you, in about ninety seconds, before you send anybody a dollar: the NMLS Consumer Access database is free and public. Type in the company name. If a company wants your bank account on a monthly draft and it isn’t there, you have learned everything you need to know.
The fee tells you something too. The contract charged 25% of the debt you enrolled. Connecticut caps a debt negotiator at 10% of the amount your debt is actually reduced — a completely different number, tied to a result rather than to your hopes. When the fee is calculated on what you owe instead of on what they save you, they get paid whether or not anything happens. Which, in this case, the regulator says is exactly what occurred.
If you’re paying a debt relief company right now and you can’t say where your money is sitting, that’s your afternoon. Ask them, in writing, for the name of the bank holding it. A real one will tell you.
Why the credit bureaus get sued this much, and what it means when it’s your file
While we’re on things people blame themselves for. In the last week, federal courts took in at least 137 new suits naming the three big credit bureaus — 73 against Equifax, 37 against Experian, 27 against Trans Union. Georgia, Michigan, Texas, Illinois, Florida, California.
Two honest caveats, because a number like that is easy to oversell. It’s federal courts only, and the Fair Credit Reporting Act lets people sue in state court too, which we don’t track at all. And the federal index runs a week or two behind itself, so the most recent days are undercounted. So 137 is a floor, twice over. The real number is higher and I can’t tell you by how much.
Here’s why I bring it up anyway. When something’s wrong on your credit report, most people treat fixing it as a favor they’re asking — a chore, a bit of admin, faintly embarrassing. It isn’t. The accuracy of that file is a legal obligation that sits on the bureau, not on you, and several hundred people a month are in federal court about it. You are not being difficult. You’re one of the ones who noticed.
Money you might actually be owed
MOVEit, through Ernst & Young and Bank of America — $2.5 million. If your information was caught in the MOVEit breach between May 27 and May 31, 2023, this one’s open. It’s $100 flat with no paperwork at all, up to $2,500 with documentation of ordinary costs (bank fees, phone calls, and your own time at $25 an hour up to four hours), and up to $10,000 for real identity-theft damage. Two years of credit monitoring on top. Claims close October 8, 2026 — but if you want to opt out and keep your own right to sue, that decision is due September 8, which is thirteen days away. Details.
Healthcare Services Group — $3 million. This one’s for people who got a breach notice tied to the September 27, 2024 incident. Up to $5,000 if you can document losses, and — this is the useful part — a share of what’s left even if you can’t document a thing. Three years of credit monitoring. Claims close October 1, 2026; opt-out is September 4. Details.
Two more worth a look if either touches you: the $475,000 Total Vision data breach settlement, and — if you’re a Detroit water customer — the $4.45 million Detroit water rates settlement.
Claims worth knowing about, all still unproven
These are filings, not findings. Nobody’s been held liable, and I’m linking them so you can read the allegation rather than take my word for the shape of it.
Jackson Hewitt and Intuit are accused of charging fees that break the Military Lending Act — worth flagging because that law caps the all-in rate on most consumer credit to servicemembers at 36%, and a lot of people in uniform don’t know it covers them. Separately, a judge has let a Military Lending Act case against Bank of America go forward, narrowed but alive. TikTok is accused of sending marketing texts that violated the TCPA. Steve Madden is accused of running inflated “reference prices” to make discounts look bigger than they were, and Google is facing the same accusation about its AI subscription pricing. Two very different companies, one very old trick.
The one to warn someone about
This is the one to forward. In the last two days, law enforcement in three separate places — Palm Desert, California, Calhoun County, Michigan, and Huron County, Michigan — all put out the same warning: somebody is phoning residents, claiming to be a deputy or a federal agent, and demanding money.
Three departments, two states, inside forty-eight hours. That’s not three local incidents. That’s an operation working a list.
The Palm Desert version is the one I’d most want my own mother to have heard, because it doesn’t sound like a shakedown at all. The caller says he’s from the FBI, tells you your money is at risk, and helps you move it somewhere “safe.” You aren’t being robbed, in the story he’s telling — you’re being rescued. That’s a much harder thing to hang up on than a demand.
What makes any of these work is that they sound procedural rather than greedy. There’s a case number. There’s a real deputy’s name, because those are public. And there’s a deadline, which is the whole engine — just enough time to panic, not enough to call anyone.
So here’s the rule, and it has no exceptions: no sheriff’s office, no court, and no federal agency will ever call you and ask for money. Not by gift card, not by wire, not by Cash App, not by crypto, and not by “verifying” your debit card. If someone is on the phone asking for any of those, you already know it’s a scam, no matter how much of your information they seem to have. Hang up and call the department back on the number from its own website. The FTC keeps a plain-English page on exactly this (how to avoid a government impersonation scam) and it’s worth three minutes.
Tell somebody over seventy about this one today. It’s the single most useful thing in this email.
Also worth two minutes
Glenmark is facing a class action over its blood-pressure drug Carvedilol, alleged to be contaminated with nitrosamines. If that’s your prescription, don’t stop taking it on the strength of a newsletter — ring your pharmacist and ask, because stopping a blood-pressure medication on your own is its own risk.
And one thought on the two people at the top of this email. Both were paying a company every month specifically to avoid bankruptcy, and between them they’re out $15,000 with every original debt still standing. Whatever you think of bankruptcy, it has a court, a judge, a trustee and a docket you can look up. The alternative they bought had a PDF contract and a phone number that stopped being answered. That asymmetry is worth sitting with before you pay anyone to keep you out of a courtroom.
Before you go
If one person came to mind while you were reading — the sheriff scam, or somebody you know who’s sending money every month to a debt relief company they can’t quite describe — forward this to them. That’s how this list grows, and it’s the only way I ask.
You want the longer version of all this? The Weekday Briefing is the depth to this email’s breadth. And if you’d rather just ask me something without giving your name, Ask Steve is free, private, and I’m not selling anything at the end of it.
Everything above is what I’m seeing and what I’d tell my own family. You know your situation and I don’t. Take it as input, not instruction — nobody gets to tell you what to do with your money, me included.
One last thing. Reading an email like this one can leave you feeling like it’s all happening to you — the scammers, the bureaus, the outfit with your $7,000. It isn’t. In thirty years I’ve watched an enormous number of people get out of this, and almost none of them did it with a windfall or a clever trick. They did it by looking at one honest number and making one decision, and then doing that again the next week. That is genuinely how it goes. You’ve got more room than today made it feel like.
Back tomorrow.
— Steve
Bonus Section
A few places I actually use, and what I get out of telling you. Each one shows a plain link and my referral link. If you use mine, the company may hand us both a small bonus. The plain link goes to exactly the same place — it just pays me nothing, and you nothing. Use whichever you like; genuinely, it’s your call.
I’ve also listed places I like that pay me nothing at all, so you can see the difference.
Cash that actually earns something
Betterment — their Cash Reserve account is the closest thing here to a plain high-yield savings account. (my referral link)
Robinhood’s cash sweep pays competitively too. The good rate sits behind their paid Gold tier — I pay for it myself — so on a small balance the subscription can eat the gain. It’s under Investing below. Do the arithmetic before you subscribe.
Saving without having to think about it
Acorns — rounds up your spare change and invests it automatically. I pay for it, and the reason is simple: it saves money I’d otherwise spend without noticing. (my referral link)
Investing
Robinhood — the platform I run my own experiment on. Uninvested cash is swept to FDIC-insured program banks, so it doubles as a cash account. The competitive rate requires their paid Gold subscription, which I pay for myself — worth it at my balance, but do the arithmetic on yours. And note Robinhood doesn’t pay that interest itself; the program banks do. (my referral link)
And three I recommend on merit, where I get nothing at all: Vanguard for low-cost index funds, Schwab for a full-service brokerage, and American Century — I was a happy customer there for decades.
Rates and terms move, and each of these has its own conditions. Go look at today’s numbers before you move a dollar.
A free conversation about your situation
Damon Day is an independent debt coach, and my co-host on Get Out of Debt Guy. I want you to know that before you decide anything. I receive no payment for this referral.
The consultation is free. The only time money changes hands is if you decide you want to hire him as a consultant. Go to DamonDay.com and schedule — he doesn’t cold-call anybody, and neither do I.
Or ask me, anonymously
Ask Steve — free, private, and I’m not selling anything. No account, no email, no sales pitch at the end of it.