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Loeb & Loeb to Debt Settlement Industry, Loopholes or Nooses: Be Careful Where You Stick Your Neck

Apparently the law firm of Loeb & Loeb put out a presentation recently to provide some last minute guidance to the debt settlement industry. You’ve got to love the title, “Loopholes or Nooses: Be Careful Where You Stick Your Neck”

On the subject of selling bundled products with debt settlement services in order to increase income.

Loeb & Loeb to Debt Settlement Industry, Loopholes or Nooses: Be Careful Where You Stick Your Neck

On the issue about using the internet only and avoiding the use of the telephone will help debt settlement companies avoid the telemarketing sale rules put forward by the FTC.

Loeb & Loeb to Debt Settlement Industry, Loopholes or Nooses: Be Careful Where You Stick Your Neck

On the issue that debt settlement companies that comply with the law still have significant opportunities.

Loeb & Loeb to Debt Settlement Industry, Loopholes or Nooses: Be Careful Where You Stick Your Neck

About why debt settlement companies should comply with the new telemarketing sales rules that will go into effect on October 27, 2010.

Loeb & Loeb to Debt Settlement Industry, Loopholes or Nooses: Be Careful Where You Stick Your Neck

FTC TSR compliance can open new doors if debt relief companies will play by the rules.

Loeb & Loeb to Debt Settlement Industry, Loopholes or Nooses: Be Careful Where You Stick Your Neck

For more information or assistance from Loeb & Loeb contact:

Michael L. Mallow
[email protected]
(310) 282-2287

Michael A. Thurman
[email protected]
(310) 282-2122

Loeb & Loeb to Debt Settlement Industry, Loopholes or Nooses: Be Careful Where You Stick Your Neck
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Steve Rhode

    Thanks for the comment. Just posted this article as a result.

    Steve

  • Merovingian TV

    Fees payable to Debt Settlement Companies can only be cut from the Settlement Function (upon settling a debt) after Oct. 27, 2010. Specifically/when NW sends out the settlement check to the Creditor/Collection Agency, N.W. will electronically credit the Debt Settlement Company bank on file. Note World is eliminating the (up front) Program Fee Function upon enrolling new clients.

    NW doesn’t gain interest off these accounts. They’re also eliminating 5 of their other b.s. “grey area” fees, nsf’s cbp, etc.. However they still will collect the $12.50/mo service fee. (which is upfront)

    What strikes me as odd, is N.W. claims this $12.50 monthly fee is ok b/c they are an independent 3rd party so they’re TSR exempt. But if they are truly independent, than let the DS companies do what thou wilt under the law and let the law handle it. However they’re not leaving it up to DS companies to decide if they’re exempt or not from the TSR b/c they don’t want to be caught aiding and abetting. So is N.W. aiding & abetting or are they truly an independent participator? If they’re aiding and abetting, then they should also cut the upfront $12.50 monthly fee along with the Upfront Fee, like they will. If they’re truly an independent 3rd party, then they should do as the DS companies instruct them to do. Make up your minds NW.

    (I know what you are thinking) {don’t all d.s. companies have to eliminate their advance fee}… but it’s a simple fact that not all companies under NW will be effected by the TSR. I say let the market decide, although State AG’s are soon to fill in the intrastate cracks I believe.

    I suspect the liability and risk is just too much for NW to be caught as aiding and abetting, so they’re painting a broad brush stroke to mitigate the risk. But they simply won’t be able to survive if they don’t charge $12.50/month beyond several months. It’s the lesser of two evils.

    Coincidentally it’s actually more profitable under the new TSR to run a non-profit D.S. Company in CA now than a For Profit D.S. Company in CA.

    This new rule is classic over-reaction.

  • Joe_debt_jr

    NoteWorld Adhering to FTC Regulation
    October 20, 2010 :: Linda Remsberg
    NoteWorld has spent the last three months reviewing the various interpretations of the Federal Trade Commission’s new regulations regarding the debt settlement industry. After careful consideration it is NoteWorld’s decision to only provide payment servicing for new consumers in debt relief programs where fees are charged or collected after debt relief services have been provided as described by the FTC. This policy adheres to NoteWorld’s promise to rigorously comply with regulation for our customer’s protection.

    Effective October 27, 2010, we will adhere to the advance fee ban by no longer accepting new accounts from programs which charge debt relief service fees prior to settlement. Our servicing of payments for accounts boarded with us prior to October 27, 2010, will not be affected.

    As a money transmitter NoteWorld will gladly continue to process payments for other products and services while providing the same high level of service.

    NoteWorld believes that adhering to the advance fee ban will open up the market for your company’s services to millions more consumers and be very profitable for your business going forward.

    We invite you to join NoteWorld’s VIP Club where you will have exclusive access, at no additional charge, to quarterly updates on NoteWorld research on debt settlement demand, NoteWorld’s Market Research Notes on industry trends and a quarterly diagnostic report on your consumer portfolio.

    NoteWorld is here to support you and your consumers today and, by assuring compliance with the FTC regulations, we will be here to support you in the future. Source – http://www.noteworld.com/WhoIs

  • Joe_debt_jr

    Mero, can you explain in details what you mean by that. What’s considered advance fee for Note World? Are they switching to a fully dedicated SPA for the client side only? or does the company enrolling these clients can still upload the SPA accounts for the consumers? I wonder since the TSR ruling these clients must have their own dedicated account where they have full control and any additional interest earned is theirs. If that is the case how is the company servicing these clients be paid? Is Noteworld going to transmit the part of the clients monies to pay for fees serviced? Or the client has to cut the company the check after the settlement has been reached?

  • Merovingian TV

    Yup. Note World is officially out of the advanced fee business. They said Global will soon follow.

  • http://twitter.com/MerovingianTV Merovingian TV

    Yup. Note World is officially out of the advanced fee business. They said Global will soon follow.

    • Anonymous

      Mero, can you explain in details what you mean by that. What’s considered advance fee for Note World? Are they switching to a fully dedicated SPA for the client side only? or does the company enrolling these clients can still upload the SPA accounts for the consumers? I wonder since the TSR ruling these clients must have their own dedicated account where they have full control and any additional interest earned is theirs. If that is the case how is the company servicing these clients be paid? Is Noteworld going to transmit the part of the clients monies to pay for fees serviced? Or the client has to cut the company the check after the settlement has been reached?

      • http://twitter.com/MerovingianTV Merovingian TV

        Fees payable to Debt Settlement Companies can only be cut from the Settlement Function (upon settling a debt) after Oct. 27, 2010. Specifically/when NW sends out the settlement check to the Creditor/Collection Agency, N.W. will electronically credit the Debt Settlement Company bank on file. Note World is eliminating the (up front) Program Fee Function upon enrolling new clients. NW doesn’t gain interest off these accounts. They’re also eliminating 5 of their other b.s. “grey area” fees, nsf’s cbp, etc.. However they still will collect the $12.50/mo service fee. (which is upfront) What strikes me as odd, is N.W. claims this $12.50 monthly fee is ok b/c they are an independent 3rd party so they’re TSR exempt. But if they are truly independent, than let the DS companies do what thou wilt under the law and let the law handle it. However they’re not leaving it up to DS companies to decide if they’re exempt or not from the TSR b/c they don’t want to be caught aiding and abetting. So is N.W. aiding & abetting or are they truly an independent participator? If they’re aiding and abetting, then they should also cut the upfront $12.50 monthly fee along with the Upfront Fee, like they will. If they’re truly an independent 3rd party, then they should do as the DS companies instruct them to do. Make up your minds NW. (I know what you are thinking) {don’t all d.s. companies have to eliminate their advance fee}… but it’s a simple fact that not all companies under NW will be effected by the TSR. I say let the market decide, although State AG’s are soon to fill in the intrastate cracks I believe. I suspect the liability and risk is just too much for NW to be caught as aiding and abetting, so they’re painting a broad brush stroke to mitigate the risk. But they simply won’t be able to survive if they don’t charge $12.50/month beyond several months. It’s the lesser of two evils.Coincidentally it’s actually more profitable under the new TSR to run a non-profit D.S. Company in CA now than a For Profit D.S. Company in CA. This new rule is classic over-reaction.

    • Anonymous

      NoteWorld Adhering to FTC Regulation
      October 20, 2010 :: Linda Remsberg
      NoteWorld has spent the last three months reviewing the various interpretations of the Federal Trade Commission’s new regulations regarding the debt settlement industry. After careful consideration it is NoteWorld’s decision to only provide payment servicing for new consumers in debt relief programs where fees are charged or collected after debt relief services have been provided as described by the FTC. This policy adheres to NoteWorld’s promise to rigorously comply with regulation for our customer’s protection.

      Effective October 27, 2010, we will adhere to the advance fee ban by no longer accepting new accounts from programs which charge debt relief service fees prior to settlement. Our servicing of payments for accounts boarded with us prior to October 27, 2010, will not be affected.

      As a money transmitter NoteWorld will gladly continue to process payments for other products and services while providing the same high level of service.

      NoteWorld believes that adhering to the advance fee ban will open up the market for your company’s services to millions more consumers and be very profitable for your business going forward.

      We invite you to join NoteWorld’s VIP Club where you will have exclusive access, at no additional charge, to quarterly updates on NoteWorld research on debt settlement demand, NoteWorld’s Market Research Notes on industry trends and a quarterly diagnostic report on your consumer portfolio.

      NoteWorld is here to support you and your consumers today and, by assuring compliance with the FTC regulations, we will be here to support you in the future. Source – http://www.noteworld.com/WhoIsNoteWorld/News

      • http://GetOutOfDebt.org Steve Rhode

        Thanks for the comment. Just posted this article as a result.

        Steve

  • AlexV

    I do have to say that I appreciated the firm presentation that Michael gave in spite of some non believers that this could be a true option. I did speak up and reminding everyone there that in that room there were at least 3 companies in the room that have been peromance model for well over 8 years.
    THE MODEL WORKS!!!!! and it in fact can work exceptionally well for all parties, the Consumers, the creditors and the companies providing the service.
    We all need to remember that we are HIRED to SETTLE the debt, so that is what we should focus on. That means educating the consumers and keeping them on track to ensure success, no legitimate company will ever say this is “EASY MONEY”, it’s not but it is worth it when you hear from the consumers and how this process has changed their financial life for the better.
    I say this to the doubters and the newer companies…Not until you get a consumer that breaks down and tells you how they were on the verge of taking their life and you help them get out of the hole, will you really know what this means to consumers!
    Alex Viecco
    NewEraDebt

  • AlexV

    I do have to say that I appreciated the firm presentation that Michael gave in spite of some non believers that this could be a true option. I did speak up and reminding everyone there that in that room there were at least 3 companies in the room that have been peromance model for well over 8 years.
    THE MODEL WORKS!!!!! and it in fact can work exceptionally well for all parties, the Consumers, the creditors and the companies providing the service.
    We all need to remember that we are HIRED to SETTLE the debt, so that is what we should focus on. That means educating the consumers and keeping them on track to ensure success, no legitimate company will ever say this is “EASY MONEY”, it’s not but it is worth it when you hear from the consumers and how this process has changed their financial life for the better.
    I say this to the doubters and the newer companies…Not until you get a consumer that breaks down and tells you how they were on the verge of taking their life and you help them get out of the hole, will you really know what this means to consumers!
    Alex Viecco
    NewEraDebt

  • Damon Day

    I just re read your post and I may have misunderstood your last point. If there is a “Valkyrie like” movement inside of TASC where companies that actually are committed to helping consumers and have not been front loading their fees for quite awhile are trying to get rid of these other guys who are just trying to skirt the upfront fee ban, then that is something I could get behind, however when you mention big boys in TASC, I can’t think of any “Big Boys” in TASC that I could support at this time.

    Also I think the TASC and USOBA names are so tainted that if there were some actual good guys in those organizations, they would be better off starting over and building a trade organization that actually did what they claim they stood for.

    Do you have any specifics on who is doing what?

  • Damon Day

    Hey Jason,

    Well to be perfectly blunt. I think the companies that were against it before they were for it are hypocritical posers. Now many of them are trying to play it off like it is some great thing that they were behind the entire time. I am all for giving companies a second chance if they have truly seen the error of their ways and really do want to help people. However you have a lot of these guys shifting gears over night and then trying to jump out in front and say this new law is great and we fully support it blah blah blah, when a few months ago they were spending big money to prevent it from passing and putting forth ridiculous claims like charging consumers all of the fees upfront is only done for the benefit of the consumer.

    I have a special section on my blog for these companies called “Excuse Me, I call Bullshit”. I have only had the time to write about a few of the companies because I am so busy helping consumers clean up the messes that most of these companies created, but I hope to be getting back to my articles shortly.

    As far as TASC meeting with the FTC, I am not sure how TASC could possibly even dream that they have any credibility at this point to do anything, but they are going to do what they do. The only thing I can do is spread awareness about what they really are and what they stand for, and hopefully enough of their members will either go out of business or come to the revelation that they are funding their own demise if they stick with TASC and USOBA.

    Only time will tell, but it has sure been fun for me to poke my finger in the eye of companies that are hurting consumers :-) I am sure I will be busy for a very long time.

  • Jason

    Damon- what did you think of the big push for advance fees by the big companies, now some of the big companies are going to comply with the FTC, they feel that all of the companies charging the advance fees (that they worked so hard to try to keep) are evil. I heard some of the big boys in TASC are meeting with the FTC soon to try to take out the competition (the companies charging advance fees)

  • Damon Day

    I just love how all of this stuff I have been saying and getting constantly attacked for by settlement sales people, is now touted as a good thing by settlement companies who just a few months ago were saying that front loading is the only way it can work and it is best for consumers. Oh, and there will be a mysterious power shift if we don’t get all our money first.

    Now apparently since they have no choice, we learn among other things that the original creditors will be competing for the first dollars. It will end most of the abuse. Will lead to better conversions and increased retention rates, and reduces the length of time to first settlement.

    HMMMMM

    How do you like them apples Housser?

  • http://DamonDay.com Damon Day

    I just love how all of this stuff I have been saying and getting constantly attacked for by settlement sales people, is now touted as a good thing by settlement companies who just a few months ago were saying that front loading is the only way it can work and it is best for consumers. Oh, and there will be a mysterious power shift if we don’t get all our money first.

    Now apparently since they have no choice, we learn among other things that the original creditors will be competing for the first dollars. It will end most of the abuse. Will lead to better conversions and increased retention rates, and reduces the length of time to first settlement.

    HMMMMM

    How do you like them apples Housser?

    • Jason

      Damon- what did you think of the big push for advance fees by the big companies, now some of the big companies are going to comply with the FTC, they feel that all of the companies charging the advance fees (that they worked so hard to try to keep) are evil. I heard some of the big boys in TASC are meeting with the FTC soon to try to take out the competition (the companies charging advance fees)

      • http://DamonDay.com Damon Day

        Hey Jason,

        Well to be perfectly blunt. I think the companies that were against it before they were for it are hypocritical posers. Now many of them are trying to play it off like it is some great thing that they were behind the entire time. I am all for giving companies a second chance if they have truly seen the error of their ways and really do want to help people. However you have a lot of these guys shifting gears over night and then trying to jump out in front and say this new law is great and we fully support it blah blah blah, when a few months ago they were spending big money to prevent it from passing and putting forth ridiculous claims like charging consumers all of the fees upfront is only done for the benefit of the consumer.

        I have a special section on my blog for these companies called “Excuse Me, I call Bullshit”. I have only had the time to write about a few of the companies because I am so busy helping consumers clean up the messes that most of these companies created, but I hope to be getting back to my articles shortly.

        As far as TASC meeting with the FTC, I am not sure how TASC could possibly even dream that they have any credibility at this point to do anything, but they are going to do what they do. The only thing I can do is spread awareness about what they really are and what they stand for, and hopefully enough of their members will either go out of business or come to the revelation that they are funding their own demise if they stick with TASC and USOBA.

        Only time will tell, but it has sure been fun for me to poke my finger in the eye of companies that are hurting consumers :-) I am sure I will be busy for a very long time.

      • http://DamonDay.com Damon Day

        I just re read your post and I may have misunderstood your last point. If there is a “Valkyrie like” movement inside of TASC where companies that actually are committed to helping consumers and have not been front loading their fees for quite awhile are trying to get rid of these other guys who are just trying to skirt the upfront fee ban, then that is something I could get behind, however when you mention big boys in TASC, I can’t think of any “Big Boys” in TASC that I could support at this time.

        Also I think the TASC and USOBA names are so tainted that if there were some actual good guys in those organizations, they would be better off starting over and building a trade organization that actually did what they claim they stood for.

        Do you have any specifics on who is doing what?

  • Andy Faria

    As the clock ticks away we hear the patter of the rats scurry.

    This is good stuff.

  • http://northeast-properties.com Andy Faria

    As the clock ticks away we hear the patter of the rats scurry.

    This is good stuff.

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