Has the Consumer Debt Relief Initiative Hijacked the AFCC


Dear Steve,

The recent announcement by the AFCC regarding third-party ancillary products has caused a huge divide within the AFCC, with most believing the AFCC has been hijacked and moving over to CDRI (Consumer Debt Relief Initiative).

It seems the good old boys are trying to gobble up market share by either putting the small to mid-size companies out of business or forcing them to sell with their latest announcement regarding third-party services.

This is a sleight of hand opinion intended not only to deflect attention away from their predatory loan programs but also to throw the small to mid-sized companies under the regulatory bus.

Meanwhile, CDRI just released their position on third-party services that offers a more realistic view of these needed services.

Has the AFCC been hijacked by Freedom, National, and Century and trying to squeeze the small to mid-size companies out of business?



There are so many layers to your question.

I tried to start a debt relief association of good actors at one time, and it was a great learning experience. First, I learned that an association struggles to balance member needs versus reality.

Consumer Debt Relief Initiative is interesting. Their site says, “Consumer Debt Relief Initiative (CDRI) was founded in late 2020 as a new association to represent the debt settlement industry. Our founder is a veteran industry expert dedicated to the proposition of improving the narrative around debt settlement. CDRI’s primary areas of concentration will be on proactive advocacy and coalition-building, as we believe they are key to reducing legislative threats and regulatory scrutiny.” – Source

I find it interesting that a focus is on “reducing legislative threats and regulatory scrutiny.” As an association representing its members, that seems like a worthy goal for membership. But it is a red flag for regulators.

If I were a regulator, I’d put members on yet another watch list, and when issues arose, ears would perk up.

I realize my point of view is framed by the experiences I’ve had both in and out of the industry. Mine is not the only correct position since others have had different experiences.

But Here is My Take

I’ve felt associations have done more harm than good to the industry for a long time. The key to subverting restrictive legislation and regulation is not to persuade lawmakers after the bad actors harmed consumers but to stop the bad actors from perpetrating frauds.

See also  CRL Report Results in Silence From the Debt Relief Industry

Regulation is a broad brush used to address bad actor business models. By the time enough companies have adopted the bait-and-switch alleged personal loan to settlement model, a wake of consumer carnage will be left, and regulations against that are coming.

Associations seem to make money by selling hope to members. Yet time and time again, the associations have failed to stop regulations because they never focused on stopping the bad actors early.

I might be simple-minded but shedding light on bad industry practices and working with regulators gives the debt relief industry clout and a cooperating partner instead of an adversarial relationship with regulators.

Shedding light is what I’ve been trying to do here on the GetOutOfDebt.org site for years. And what have I received from many debt relief companies; as a result, legal threats and death threats.

Broad Brush Sweeps up the Smaller Companies

The bad actors engage in a scheme that leaves damaged consumers. My site is littered with examples of companies that have run afoul of the law.

Debt relief schemes do pay if you are smart. If you suck in enough people, skim money off the income and send it into hiding, and then pay fines and cry poor when you get shut down, you can make millions.

But big or small, those companies are the problem, not the legislation. It’s like claiming scabs are bad, but it would not be an issue if you didn’t cut yourself, to begin with.

Legislation is the symptom, not the problem. The problem is the behavior that caused the legislation to be initiated, to begin with.

Back in the day, when I ran a debt relief company, I received a call from a regulator I had developed a friendship with. He said, “Steve, some states are getting ready to pass regulations because of what Ameridebt did and it will paint regulations with a broad brush, It is going to impact all credit counseling companies. Here is the proposed policy and I’m open to suggestions not to impact good outfits like yours.”

After thinking about it, there was no other alternative that would protect consumers and not leave open the doors for abuse. That’s when I learned my reality lesson.

Associations Make for Great Vacations

I see that the CDRI conference is coming up soon in Cabo. – Source

I would not be surprised if members got together at a luxury destination and bitched and complained about how unfair regulators and legislation are.

I doubt there will be planning and action to out the industry’s bad actors.

If I’m right, the cycle will continue.

By the way, the American Fair Credit Council conference is at the upscale Four Seasons hotel in New Orleans. – Source

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Then you have the issue of associations going to members to raise money for this particular effort or that lawsuit against a regulator.

What’s the point? If we addressed the issues when they arose, then fighting back would not be necessary. And hiring expensive law firms and lobbyists wouldn’t be needed.

Let’s Look at Third-Party Services

There are legitimate third-party services. But there is already a history of companies selling benefit plans and other bogus packages that consumers never needed—things like educational programs, discount clubs, money-saving business opportunities, etc.

Instead of calling those out, they were left to run, and the broad brush comes out.

I’ve resigned myself that this is the way the debt relief space will be, reactive. But it is a poor way to represent consumers and allow good companies to thrive.

Hell, even the credit counseling niche has its demons. When was the last time you heard from a credit counseling association about the harmful acts of creditors? Never or rarely. And why do you think that is?

Credit counseling won the public relations war because they were a friendly non-profit that claimed to put consumers first. Is there an example of that in the debt settlement space?

I bet participants in the debt settlement space would fight tooth and nail to have to give up ownership to form a transparent and publicly owned company that did not personally benefit them.

And the restrictive regulations will continue to pile up.

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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
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8 thoughts on “Has the Consumer Debt Relief Initiative Hijacked the AFCC”

  1. I have been a long-time reader and work at one of the companies affected by this AFCC ruling and I see several things wrong with your response.
    1. You sell banner ads which is only used to generate leads that are then sold to Freedom, National or the next highest bidder. Ive seen their banner ads on your site plenty of times.
    2. You are confusing offering loans then converting the turndowns to debt settlement clients.  This article, and what you missed is that these companies are offering loans to consumers after 120 days of being enrolled and after the consumer has seen at least one settlement. This model pays the debt settlement companies TWICE!  Once when all the debts are settled and again on the loan.  The idea is to get consumers out of debt, not to put them right back into debt with a high interest rate loan.
    3. The other part you missed is the power play behind the AFCC decision. You apparently see nothing wrong with the giants creating rules that hurt the other players.  This deflection was created because the CFPB is looking at this loan model, so they threw us all under the bus to force us out of business and sell to them.  I just hope the CFPB doesn’t take the bait and is not blind to what is happening.
    4. Your response spoke nothing of the above points, all you did was bash both associations.

    • Jennifer, thank you for your response. Let me address your concerns.

      1. I don’t sell banner ads. Ads on the site are controlled by Google. I have no say, input, or control over what ads appear. In fact, when I look at the site I never see debt relief ads anymore. Google ads are controlled by what the user has viewed, visited, or Google thinks they have an interest in.

      2. I don’t think I’m confusing the issue. Both approaches are problematic. This is not the only example of companies getting paid twice. Don’t forget the buy the debt and then settle it, model, as well.

      3. It’s not that I see anything right or wrong about the ability of an association to make the rules and call the shots. The debt relief industry has been heavily influenced since the 1930s by those with more perceived power or money to manipulate the business model. I think conflating right and wrong with reality is apples and oranges. I don’t think the CFPB gives a rats ass about the association infighting.

      4. I think you will find my response was not about bashing both associations but the reality that associations are self-serving and not engaged in preserving the debt relief industry by putting consumers first and that results in broad-brush regulation. See my post starting at “But Here is My Take.”

      I really appreciate you taking the time to share your opinion and love the discussion.


    • Jennifer,

      I’ve been thinking a lot about your CFPB statement in your comment. Thought-provoking.

      I think people misunderstand regulators. They are just people like you and me. People can be driven by assumptions, beliefs, and emotions. Regulators have a decades-long history of having to deal with bad actors in the debt relief space. A distrust of associations is already baked in.

      AFCC, CDRI, TASC, USOBA, or any other combination of letters has never done a good job to gain the trust and respect of regulators. To do this an association must demonstrate they put consumers first and not members first to grow business.

      Show me a debt relief association that has bothered to publicly shun and out a member because of bad practices. How about a real consumer complaint process that looks at member complaints and takes transparent action?

      I think the session I did at a meeting I organized in 2010 will be informative. See https://getoutofdebt.org//24133/rally-in-raleigh-2010-%e2%80%93-video-of-session-on-how-to-deal-with-state-regulators-with-lynne-weaver-assistant-attorney-general-nc

      If regulators recognized any association as putting consumers first and rooting out the bad actors in their own niche, then regulators will eventually care. Until then all associations are painted with the same brush and I doubt any regulator will give a damn about any association.

      This is a problem any association can fix, but they don’t.


  2. The title of this article is very misleading and it seems you literally missed the actual story. The way I read your article, it seems like the AFCC has been hijacked by the big boys and they are forcing the small to mid-sized debt settlement companies out of business or to sell.  Outside of knowing it is not the place of an association to set these types of guidelines, I don’t see how CDRI has anything to do with this story or why you avoided the power play taking place in the industry.  Please tell me you didn’t try to bury or redirect the actual story because you sell leads to the same companies.  How are you ok with and don’t report enough about the fact that these giants get paid to settle debt then get paid again when they offer the predatory loans to those enrolled in their program but never have to disclose ALL the fees they have earned? This stinks of a cover up Steve.


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