A tipster (send in your tips here) sent me a copy of a recent letter sent out by the American Financial Services Association (AFSA) to the National Association of Attorneys’ General. AFSA is a national trade group that represents credit card issuers, consumer sales and finance companies, mortgage lenders, car financing lenders, etc.
The letter is interesting since it reinforces information that we’ve heard before from others inside the creditor side of things, they don’t like debt settlement companies, at least the bullshit ones.
This seems to also contradict the debt settlement industry sales point of “creditors love us and want to work with us.”
The creditor trade association letter said:
As the trade group for the consumer credit industry, we are in a better position than most to observe the increasing danger to consumers of so-called debt-settlement companies – businesses that claim to offer consumers a route out of debt, but often cause untold damage through actions which if not outright illegal, are unethical and morally indefensible.
While this process is going on (and with the inevitable effect on credit ratings, late fees, increased interaction with creditors and collection agencies, etc), the debt settlement firm charges monthly fees for their services – despite the fact that there is often no activity going on at this stage. This is often on top of hefty up-front fees.
So let’s get this straight, consumer groups don’t like the activities and marketing of debt settlement companies and creditors feel the actions of many debt settlement companies is not cool. So who loves the debt settlement industry bad actors besides the trade associations?
And if the industry wants to gain respect why don’t the debt settlement trade association work to clean out the bad actors and make a reputation worthy of taking home to Mom?
Good for AFSA for speaking up on this matter.
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