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CareOne for California SB 708 Debt Settlement Services Act With Modifications

I was communicating with Mike Croxson, president of CareOne, who shared his written testimony with me regarding his view of the new proposed California SB 708 Debt Settlement Services Act.

His testimony stated

  • the fee level set by SB 708 as a 15% of savings success fee was too low;
  • consumers that contact CareOne broke down as 48% candidates for a DMP, enrollment was 25-30%, 12% suitable for debt settlement and 5% were suitable for bankruptcy;
  • CareOne supports the ban on advance fees, mandatory disclosures, and to prohibit misrepresentations;
  • the rule is incomplete and does not apply to nonprofits, face-to-face transactions, intrastate only sales, internet only sales; and,
  • supports a fee level of at least 30% of savings.

You can see his full testimony below.

CareOne for California SB 708 Debt Settlement Services Act With Modifications
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CareOne for California SB 708 Debt Settlement Services Act With Modifications
CareOne for California SB 708 Debt Settlement Services Act With Modifications
CareOne for California SB 708 Debt Settlement Services Act With Modifications
CareOne for California SB 708 Debt Settlement Services Act With Modifications
CareOne for California SB 708 Debt Settlement Services Act With Modifications
CareOne for California SB 708 Debt Settlement Services Act With Modifications

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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

    It is my impression that it would only apply to servicing California clients so a company could be located in California but not service California clients.

  • Jjfad

    When is this expected to become law (if it is expected to pass)? Also, to whom will the SB 708 licensure and associated provisions apply? Will it apply to any company seeking to service CA consumers? What about companies based in CA…can they avoid the provisions by simply no longer servicing californians?

  • Jjfad

    When is this expected to become law (if it is expected to pass)? Also, to whom will the SB 708 licensure and associated provisions apply? Will it apply to any company seeking to service CA consumers? What about companies based in CA…can they avoid the provisions by simply no longer servicing californians?

    • http://GetOutOfDebt.org Steve Rhode

      It is my impression that it would only apply to servicing California clients so a company could be located in California but not service California clients.

  • Errick

    Making the world safe for the 50+15=55 scam. It’s like watching a tornado, awesome and beautiful yet devastating to all in tis path. They will sign thousands of desparate and scared families, take 55 cents from them, settle at 50 cents, charge 65 cents, and then convince the victims that it’s really their fault they did not have the discipline to complete the plan. Priceless.

  • Errick

    Making the world safe for the 50+15=55 scam. It’s like watching a tornado, awesome and beautiful yet devastating to all in tis path. They will sign thousands of desparate and scared families, take 55 cents from them, settle at 50 cents, charge 65 cents, and then convince the victims that it’s really their fault they did not have the discipline to complete the plan. Priceless.

    • Cupid

      Errick, my assumption is that you work in credit counseling
      at an executive level. Unless you reply that you are an attorney practicing
      debt collection or bankruptcy, it would be hard to shake me off of this.
      You have posted continuously on Care One threads on this site and rail against
      debt settlement. You never mention that CareOne also provides debt management
      plan services. Why is that?
      CareOne offers DMP’s as a for profit company. One of the few who do. They do
      not accept fair share or grant contributions from creditors to my knowledge,
      unlike the non profit DMP providers who, for the most part, are beholden to
      creditors and their whimsies because without the revenue from creditors they
      would fail as going concerns. Why is it that CareOne can do what non profits can’t?
      Are they more efficient than non profits? Probably, but let’s be real here. It
      costs less than 10 bucks a month to service a DMP client. For some I bet the
      costs are less than that. If the average monthly fee is $30 that’s at least a
      200% return! With that kind of margin, why do non profits even need fair share
      or grant money from creditors? What well run company cannot do well with a 200%
      monthly operations budget?
      I did not account for marketing. To do so would be to admit that nonprofit DMP
      providers have to market. All the stuff I see presents nonprofits as some
      benign help the community -help the people – type of set up. They are not. They
      are companies just like any other. They just don’t pay tax and have to comply
      with certain things as a result. They are to provide education. Big whoop!
      There are many free sites with constantly updated money, budgeting and finance
      education and advice that blow doors on the education offered by most non
      profits. That being the case, non profits appear to not have to pay tax for
      next to no good reason. If free sites can provide the same and better education
      to consumers at no cost and pay tax on whatever revenue they generate, why cut
      the nonprofits a tax break? Because they do the educating live in office or in
      the local community, in schools and such? Maybe, but how many of the non
      profits do that really? Could nonprofits who do not engage in DMP services do
      the same and non profits DMP-ers pay tax? Yes indeed. Would creditors cut fair
      share and grants even more because the “donations” would no longer be
      a tax write off for them? You betcha! Nonprofits may take exception to my
      stating this so simply, but it’s just not complicated.
      So, non profits market. Is that why they need grant and fair share money? The
      marketing and acquisition costs? Probably partly. I think its more a fact of
      customer attrition though. What is the success rate of a DMP client? How many
      people drop from a DMP in 3 to 12 months. Determining that number is important
      for the American public to know. If the attrition is high, it means non profits
      enroll people who should have been referred straight to bankruptcy. That’s the
      only next step according to your answer. Why take on people who cannot finish?
      For revenue and to serve the nonprofits true master, the banks. If nonprofit
      DMP providers truly serve the consumer, and given your position that its either
      DMP or BK than the only people who should ever be referred to nonprofit DMP
      providers would be because of the BAPCPA. Following your logic it’s just that
      plain and simple.

      People should TRY EVERYTHING and when failed then to bankruptcy
      is what you said above. Why Errick? Because its the moral thing to do? Because
      it generates revenue for non profits? Because it serves banks?

      So, what’s your opinion on CareOne’s DMP service they offer
      while not accepting funds from creditors? Any feedback? I know mine. Its Kudos
      to CareOne for being positioned to represent consumers more than banks.
      Nonprofit DMP-ers cannot say they represent consumers more than banks with a
      straight face.
      I guess there are some states that require a nonprofit deliver a debt
      management plan. So non profits should only exist to serve those states. I
      think those laws should be changed to allow for profit companies who can do it better
      and for less cost than the non profits and who pay tax to the treasury that
      supports this country in its current troubled economy. Why the hell should
      nonprofit DMP-ers be getting the tax break on DMP revenue when there is not
      enough in the coffers to prevent severe poverty in this nation?

      Errick – You favor DMP’s and I assume you work in the
      nonprofit sector at a high and well informed level. How consumer focused are
      the DMP-ers when 2 years ago one of the largest credit card issuers and another
      one in the top 12 were offering account holders to settle their accounts at 15%
      of the balance pre charge off? Were the DMP-ers “educating” consumers about
      that? Bet not. For me, that would mean they are not interested in helping
      consumers, just themselves and the banks they serve. Banks that, need I remind
      you, have and will continue to pay out BILLIONS of dollars for their wrong
      doing. That’s what you support Errick. A system that brought this nation to its
      worst economic condition since the great depression.

       “Now get in the pit
      and try to love someone.”

      P.S. I don’t work for CareOne or company related to them. I
      am not related to anyone who does work for them nor any contractor for them
      etc. I am just kinda sick of the Erricks and the holier than thou attitude they
      have about debt management plans that are mostly offered by nonprofits. CareOne
      is an exception and a good one for the DMP.

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