Capital Debt Settlement, based in Fresno, CA, seems to be an enigma debt consolidation company. On the one hand, they seem to have some people who love them. On the other, they’ve been accused of some bad practices, mainly when people have decided they wanted to opt out of participation.

First, the details. The company has been around since 2003, but wasn’t incorporated until 2006. The core of their business is debt settlement, which is what most of these companies actually do rather than true debt consolidation. In March 2009, they hooked up with a law firm, Allegro Law, to handle what they call “debt management”, which in essence means this company will work with Capital Debt Settlement and their clients by trying to get lower interest rates on their credit cards, something most of these companies won’t do, but also something most people can do on their own by just calling the credit card companies themselves.

Capital Debt Settlement has many certifications also. They’re a member of The Association of Settlement Companies (TASC). They’re also a member of the United States Chamber of Commerce and D&B, who says they’re the world’s leading source of commercial information and insight on businesses. They’re also a member of the International Association of Professional Debt Arbitrators, in April moving up to “Silver” status through its certification programs.

They charge the industry standard of 15% to set up your account, and have a $30 monthly fee. For once, you don’t get the scare tactic against other types of debt consolidation and protection on its main page, but they do have a page with the same standard slams on other types of debt consolidation. However, they haven’t had any complaints against them as reported by the Better Business Bureau.

So what’s the controversy? It seems that, though there haven’t been any complaints against them through the BBB, there are plenty of complaints online about them. Each complaint is about the same thing, which is people who decided they didn’t want to follow through with the program and wanted out. It seems that Capital Debt Settlement still goes into their bank account and takes some sum of money, which most people have reported as $75. Capital Debt Settlement representatives say it’s a cancellation fee, but those complaining have said it’s not in the contract. Without seeing a contract we can’t confirm that, but those who swear by the company say there is a clause in the contract stating this as a fact.

Either way, it seems that Capital Debt Settlement might be a company to talk to if you need some help in getting your bills together and getting some relief from your debt.

They’ve been in business since 2005, which makes them slightly older than some other debt relief companies. They charge the standard 15% set up fee, with no monthly or settlement fees. They’re up front in telling you that they won’t be contacting your creditors monthly, and that they won’t be able to stop creditor calls, which is what many people complain about with other companies. They also let you know up front that if you cancel, there will be no refunding of fees.

Franklin Debt Relief did something different in 2007 than we’ve seen from any other company of its type. It actually sent out a press release against credit card companies, outing their practices and saying they pushed consumers deeper into debt. It seems to have been prophetic, based on what’s happening today with credit cards raising their rates at a moment’s notice because of the bad economy. One of the quotes that their spokesman at the time made was:

“It is only when a person is in financial trouble that they become aware of the charges that they have to pay. At that point they are too far involved and it becomes impossible for them to avoid these additional charges. At Franklin Debt Relief we believe that these terms should have to be made more prominent to consumers and also that legislation should be put in place to cap these charges.”

Franklin Debt Relief seems to be a company that’s doing the right thing by its customers, mainly by letting them know up front what they may be in for. It’s a step in the right direction.