I made the following podcast of this article so you could enjoy it with background music.
But as a journalist writing about the debt relief world and as someone that has lived inside that very same world for years and years I see patterns and trends. I see many younger than me, just jumping into some sort of debt relief business “opportunity” without care, research and a focus on even the least bit of compliance. I see perceived opportunity being celebrated and raced to without consideration of what’s illegal or deceptive. And most importantly I see profits celebrated over people.
Debt settlement companies had years to create meaningful trade associations that could have crafted real guidelines to create ethical borders to prevent the widespread damage done to consumers by bad actors. And look, let’s be honest, the bad actors in debt settlement are not a “few” as the associations like to say. It’s rampant.
If anyone needs to be looked at closely with disdain it is the trade associations that failed regulators, consumers, and the good guys that wanted to build an industry with a foundation of respect.
Some say they don’t like what I write about the debt settlement industry but the reality is that if companies didn’t do bad things there would be nothing to write about. It reminds me of that old joke — Guy goes to the doctor and says, “Doc, it hurts when I wave my arm like this.” Doctor says, “Well then don’t wave your arm like that.”
If the debt settlement industry as a whole had an accepted code of ethics that said deceptive marketing is unethical, lying to consumers is disgusting, and unfair business models will not be tolerated, and kicked assholes out, then you would have an industry that would have some sort of internal regulation. But that’s not what happens in the debt settlement industry of 2010.
Man-oh-man it would be wonderful to see the good guys of the debt settlement industry become more vocal and speak out strongly about the bad actions of debt settlement companies that appear to take advantage of consumers. I would celebrate it when it happens. Until then I will continue to speak out and point out activities and facts that concern me.
Look, I get the argument that most make about the evil consequences of debt settlement regulation. They say it will put good guys out of business also. And I fully agree that it will and that’s not fair but consumers continuing to get screwed by advance fee debt settlement is not fair as well.
There will never be a broad enough brush to regulate any industry that will not catch up people with good intentions. It’s just the way it is.
But let’s not get lost in good versus bad. The real sin in debt settlement is not who is behind the wheel, it’s the mode of transportation that’s dangerous. You could have Mother Teresa driving a debt settlement company and if that company was charging advance fees based on enrolled debt I would be outraged.
There is nothing about charging a fee based on enrolled debt and collecting the majority of that fee in the beginning of the plan that is fair, proper, ethical, or moral. Time and time again it has been shown that the majority of consumers enrolled in such plans do not benefit. They wind up paying more for services, getting less real help, and are generally unsuccessful in settling their debt. It’s just not a business practice that needs to continue or that can be realistically defended. Stop doing it.
As an end result of debt settlement regulation and legislation the goal is not to shut down the industry, it is to clean it up.
It would be wonderful to see an industry that:
- Would hold conventions where they would invite critics to attend and participate instead of wanting to hide from public attention.
- Would provide a product that protected the consumer with fair fees and the truth at the same time.
- Would work in collaboration with other solutions to best help the consumer in trouble rather than in competition with other solutions in order to maximize their own profit and market share.
The debt settlement industry today appears to be overshadowed with players who spout off intentional lies or misinformed statements in order to sell any consumer with a pulse into a program that the companies know for a fact will not benefit most consumers.
The debt settlement industry of tomorrow needs to be one that is honest about the services they provide, gets paid a fair and reasonable fee for ACTUAL results, is focused with enrolling qualified consumers and who wants to provide a product where the vast majority of consumers get a real benefit from participating.
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