An email went out recently that said it should be shared with a friend, and that’s what a friend did.
In January of 2021, the debt settlement industry started a new trade group, Consumer Debt Relief Initiative (CDRI). – Source
But then another debt settlement industry trade group swept the legs out from under the CDRI.
The official announcement said, “CDRI will proactively respond to legislative threats that would weaken or prevent consumers from accessing this vital debt relief option, oftentimes forcing them into default or bankruptcy.”
Interestingly they seem to think bankruptcy is a bad thing but it can be the fastest and least expensive way out of debt. I digress.
The official announcement of CDRI with the website DebtReliefAdvocates.com goes on to say, “Millions of Americans are drowning in debt, and they need the option of debt settlement to swim back to safety,” said Gordon. “By launching CDRI, we can ensure that those consumers are able to maintain control of their path to financial recovery, while protecting them from bad legislation that could eliminate debt settlement as an option. The more consumers we have climbing out of debt, the stronger our economy is, and that will only be possible with debt settlement remaining an option for consumers.”
The debt relief space can always use additional voices and groups to speak up for consumers. My first reaction though is the effort appears to be to protect fees for companies. That seems to be supported by what is coming up in this post.
This is the first I’ve heard of CDRI but as of this post they list their members as:
Allevate Financial Solutions, Alperstein & Associates, Beyond Finance, Citizens Debt Relief, ClearOne Advantage, Debt Advisors of America, Debt Blue, Debt Pay Gateway, Debt Pay Pro, Global Holdings, Greenberg Law, GRT Financial, IAPDA, J3 Corporate Solutions, JW Financial, Lending Science, Lending Science USA, Metropolitan Partners Group, Net Debt, New Credit America, One Credit Relief, Otus Academy, Pacific Debt, Pledge Financial, Real Time Resolutions, Reliant Account Management, Shipkevich, Signature Servicing Start New Financial Symple Lending, Tarkus Capital, TurboDebt, and Veritas Legal Plan. – Source
Let Me Be Clear About CDRI
I’m not faulting CDRI or any of the member companies. I get it. There feels like a threat to income for debt settlement companies and they want to protect that from happening.
But it gets strange in a hurry.
AFCC Shocking Reversal
They are also another trade group for the debt settlement industry. Their membership is listed as 1DebtFree, A New You, Accelerated Financial Services, Account Management Plus, Alternative Revenue Solutions, America Debt Resolutions, American Debt Relief, Americor Financial, Assure Financial Solutions, Atlas Debt Relief, Beyond Finance, Accredited Debt Relief, Century Support Services, Churchill Credit Solutions, Citizens Debt Relief, Clear Coast Debt Relief, Clear Financial Consumer Debt Help Associates, Consumer First Financial, Corporate Advisory Solutions, Council Law Group, Countrywide Debt Relief, Credit First Financial, CreditAssociates, Crossroads Financial Technologies, CuraDebt, Debt Advisor, Debt Advisors of America, Debt Negotiation Services, Debt Pay Gateway, Debt Pay Pro, Debt Resolution Pros, Debt Solution One, DebtBlue, DebtHelp, Debtmerica, Debtvantage, Demand Debt Relief, DMB Financial, Effective Debt Relief, Elite Financial Services, Financial Integrity Group, Financial Rescue, Freedom Debt Relief, Global Holdings, Greenspon Marder, Greenwise Financial Solutions, GRT Financial, Helperbay, IAPDA, JG Wentworth, Key Credit Repair, LeadsConnection, LegalWarranty, Lending USA, Level Debt, Liberty Debt Relief, Liberty1 Financial, Lighthouse Finance Solutions, Max Decisions, Money Ladder, My Debt Relief, National Credit Partners, National Data Systems, National Debt Relief, National Financial Relief, NetDebt, New Credit America, New Direction, New Era Debt Solutions, One US Financial, Ooraa, Optimal Debt Solutions, Pacific Debt, Panamerican Consulting, Pledge Financial, Pure Debt Solutions, Reliant Account Management, Rescue One Financial, S&N Debt Solutions, Settle Our Debt, Settlement Assist, Smart Choice Data, Square One Financial Group, Start New Financial, The Debt Management Group, Thurman Legal, Timberline Financial, US Financial Relief, and Veritas Legal Plan.
The AFCC has been an industry group in the debt settlement space for a long time in debt relief years.
But what is interesting is the overlap of some of the members in both the AFCC and CDRI. Here is why that is interesting. Akward.
CDRI and AFCC Fight it Out in Public
The CDRI sent out an email to be shared with anyone that appears to state they felt a victory was at hand in influencing a California legislator to change the proposed legislation to favor debt settlement fees.
The CDRI announcement linked to the following message in their email they felt the AFCC was behind getting the fee caps removed.
The CDRI email says they apparently felt victory was at hand, “On Thursday, April 15th, Assemblymember Wicks (author of AB 1405) did what we all expected her to do, and she accepted the proposed amendments that CDRI has fought for.”
Then it Went Down the Drain
The CDRI email gives me the impression they feel disappointed in the AFCC when they say, “Then in shocking fashion the AFCC lobbyist, who testified shortly after Assemblymember Wicks, announces that the AFCC would welcome negotiating fee caps.”
The email winds up saying, “I attended the hearing and I was quite surprised to hear AFCC’s lobbying team, who had (apparently) fought hard to remove the fee cap language from the bill, only to publicly declare in testimony to the committee they would support an industry fee cap and that it would “provide consumer protection”.
I want to first make one thing very clear; CDRI does not support industry fee caps. That is our position regardless of the situation or circumstance, and that is what we will fight for consistently for our members.
Furthermore, this latest episode is exactly why CDRI exists today. For too long AFCC has claimed to be the voice of the debt settlement industry, while not acting on the entire industry’s behalf.
CDRI was founded on the principles of transparency and full industry representation and we have dedicated ourselves to them.
As we like to say, we will always plan together, execute together, and win together.”
The email was signed by Tomas Gordon as Chairman. He is also the leader of ClearOne Advantage.
The email includes a link to watch the testimony of AFCC to limit fees.
I’m Not Sure How it All Went Bad
I have no idea why the AFCC apparently changed its position but they say in the video testimony they now feel some fees would put companies in potential violation of FTC rules. All I do know is there can’t be much good for the debt settlement industry when two industry trade groups are going at each other.