Morning After: Debt Settlement Industry Celebrating. “Game On”

It’s May 21, 2010 and in a move that only seems to amplify the arrogance of the party makers in the debt settlement industry, that appear to be no more than profiteers charging consumers tens of thousands of dollars for debt settlement service that are questionably effective and dubiously successful, it’s back to business as usual.

Yesterday the United States Senate voted for cloture to close the consideration of amendments during its discussion of the Restoring American Financial Stability Act of 2010. While the proposed legislation titled the Debt Settlement Consumer Protection Act of 2010 was attached as an amendment to that bill, it never came up for a vote on the floor of the Senate. Because of that the debt settlement industry is celebrating today.

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In an email sent to members of one trade association the message was ” It is unlikely that the debt settlement bill would be considered “germane.” So unless something weird happens, we are done for now in the Senate.”

Instead of bringing debt settlement fees back into line with what legislators and regulators feel is fair to consumers and scoring a public relations victory for the industry and extending its life, the industry is instead turning to challenge the FTC in hopes of changing rules the Federal Trade Commission is rumored to release soon that will cover the sales practices of debt settlement companies.

It’s just my opinion but the arrogance of some of these debt settlement companies is palpable when in response to their apparent victory in the Senate and presumed defeat of the Debt Settlement Consumer Protection Act they send emails out that say it’s time to “lock and load“, “Sell, Sell, Sell“, “Pony up and buy all the leads you can“, “It’s back to business“. (Have an inside tip you want to share as well? Send it to tips@GetOutOfDebt.org)

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Even during the fight to water down and block the Debt Settlement Consumer Protection Act the industry was urging companies to call their representing politician and say the bill needed to be defeated to protect debt settlement company jobs. “Thousands of jobs will be lost”, was the cry. But isn’t the real point that consumers need to be protected from fraud and abuse, not the jobs of the abusers? It just seems like the industry is using the argument that if better security is put in place at banks that bank robbers will be out of business.

My opinion is that while the industry might be celebrating a perceived victory over regulation today, it’s shortsighted at best.

This isn’t over.

Damon Day - Pro Debt Coach

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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.
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