Here is an interview with Alex Viecco from New Era Debt Solutions that I recorded today. Alex talks about why the performance based debt settlement model works well for the long-term and a bunch of other issues that are brewing right now.
The story about New Era that I mention can be found here.
Alex talks about how and why some of the upstart debt settlement companies appeared in a flurry after the downfall of the subprime mortgage market. He also says he understands why they want to collect and take fees in advance of performing the service to improve their cash flow.
He discredits the statement that at least one debt settlement trade association made that a performance fee debt settlement approach would result in less favorable settlements for consumers and says that carrying clients while waiting for settlement is just the cost of doing business.
New Era has been in the debt settlement industry for a decade and when they started the debt settlement industry was a performance fee industry and only because of the influx of new companies in the debt settlement field did companies actually switch the model to collect fees upfront. And that’s what regulators and legislators want to prevent.
Alex latter speaks about the danger to consumers who may be enrolling in an advance fee debt settlement program today when the majority of those companies will probably fail and close with the introduction of regulations that prevent the collection of advance fees. The failing debt settlement companies would leave the consumer stranded and losing all the fees paid before service is delivered.
The attorney model was discussed as well but New Era does not feel that an attorney model alone is the mark of a company that operates in the best interest of the consumer.
Despite the fact that Alex runs New Era Debt Solutions he welcomes debt settlement regulation.
You can listen to the interview below.
Interview with Alex Viecco from New Era Debt Solutions on How a Performance Fee Model Can Work by Steve Rhode
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