Debt Relief Industry Regulation / Legislation

White House Press Conference July 29, 2010 – FTC Debt Relief TSR Announcement

This is the post to follow for all the news related to the press conference this afternoon at the White House regarding the announcement of the new telemarketing sales rules that cover debt settlement and debt relief providers.

I’ll update this post with information as I can.

The plan is after the press conference with VP Biden and the FTC Commissioner, which I will be attending, I will interview a couple of FTC people for the site about what the new rules mean for everybody.

The press conference is in two hours, I’ve just arrived at the White House and now patiently waiting, make that impatiently waiting.

Depending on workspace arrangements inside the briefing room I might be able to get messages out faster via Twitter. If you have a Twitter account, follow me at @GetOutOfDebtGuy for updates and pictures from the briefing.

UPDATES WILL BE BELOW

12:18 pm – In the White House press briefing room.

12:47 pm – Killing time wandering around the press offices. Not as fancy as you might think. Tiny cubicles for each of the big networks. I posted a picture of the CNN space below.

1:12pm – Now in executive office building briefing room.

1:25 pm – Just got advance notice. No fees for firms and attorneys before providing any service, the debt relief service settles at least one debt, written agreement with creditor and consumer, consumer has made payment to creditor.

Success rates can’t be faked.

Applies to for-profit companies.

Telemarketing rules cover incoming calls.

2:06 pm – Still waiting for VP Biden to show up for press conference.

Effective date for fee ban October 27, 2010. Everything else effective September 27, 2010.


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READ  Is TASC the New Sheriff in Debt Settlement?



About the author

Steve Rhode

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.

16 Comments

  • This rule represents a blessing to companies that strive daily to produce a quality product and service to the consumers that rely on them. The pay for performance fee model will be adopted with additional provisions to remove businesses that do not comply or provide a quality service. Our customers and staff can rest assured that Everest Debt Solutions will be an active member of the marketplace and will be vigilant in producing results that mirror consumer needs.

    Sincerely,

    Tim Daniels
    Everest Debt Solutions

    • Tim,

      Thanks for the comment and update.

      How do you think debt settlement companies are going to fare in making the transition from the way fees are paid not to a pay for performance model?

      Steve

  • Well here is the time and the opportunity for the LEGITIMATE companies to come together and comply right away. Hopefully this will create the much needed flush of the Quick sales-No results companies out there.
    For all of you who follow this blog and are delivering a product for consumers that TRULY helps them….GREAT WORK.
    For all others you should move on to your next gig and let the experts help consumers get out of debt. THEY truly need the help.
    Alex Viecco
    New Era Debt Solutions

    • Amen to that.

      Alex, New Era has been an industry leader for years. With the performance based model you already have in place, I’m sure compliance to the New Rule will be an easy transition.

      Your success with a performance based fee structure has been an inspiration to how we’re trying to shape our company.

      I also hope that this New Rule will flush out the clowns and allow people like us to do our jobs without all the bullshit.

      I’m with ya man.

      Andy Faria
      Northeast Settlement Group

      • Hi Andy,
        I thank you for the comment. I believe there is plenty of room for the right doers in the industry. It is the fly by night guys that need to find a new home. Those of us who take this business seriously need to come together to manage the cost of leads and the survival of the proper format to service consumers. As the saying goes… “see you at the top” 🙂

  • With all the NEED for this type of program … what will these people do instead? It needs to be regulated not shut down. Creditors are losing too much money because they granted too much credit to individuals.

    Every time I log in to this site the first half of the page are advertisements for the companies criticized. Who gets paid off of these advertisements?

    It would be like having a website talking about how bad smoking is and then all the ad space is sold to tobacco companies?

    This product not go away it needs to be dealt with through regulation.

    The creditors cant just decide one day to raise everyones interest rates to 30% (legal?) and then shut out companies that try to help. Corporate Greed. These changes will happen but the free market will find a way around the creditors influence on government.

    • Hi Jack, You couldn’t of said it any better. I’m so happy the proper regulations are going to go in effect and weed these other companies that give the industry a bad name. So much focus is on the “shady companies” and not on the banks themselves. They are the ones doing this to Americans. The way these banks and interest rates work you can see clearly on your statements how long it will take you to pay off your debts. It’s legalized loan sharking. If you go back and look at all the money you’ve paid towards the balnces that you’ve used, most people have paid 3 times what they borrowed. Then on top of that all these credit card comapnies are raising everyones rates just becasue they can and in preperation for the new credit card laws that went into effect Feb 22. It took over 9 months for the laws to go into effect. The banks knew this was coming and raised everyone rates. Not just that but cut everyones availble balances and in some cases made them close accounts to lock in rates. By doing that the banks have damamged their credit. This is happening to people that have NEVER missed a payment. Then you call the creditors, and they don’t give a damn about you to help.
      If the credit card comapnies didn’t offer to settle the debt then there wouldn’t be such services out there. But, the fact is that they do it everyday and settle with people for a fraction of what they owe. If the banks have such a problem with “debt settlement” they wouldn’t offer to reduce anything. The fact is they will never turn their back on the millions and millions of dollars they are receiving from such companies. The banks know theyve taken advantage of people long enough and can offer such settlements becasue they made 2, 3, or 4 times what the average consumer borrowed.

      People want to disect the debt manaagment industry and the way the aggreements are worded. But, what about the credit card agreements? If people really knew what they were getting into and it was clearly stated what could happen and you had to sign off on every little disclosure like debt settlement then I doubt people would make the mistake of entering such an agreements with these banks.

    • Jack:

      Steve’s been called out on the conflict of interest thing before. He hasn’t provided a good explanation for it. But hey, we’ve all gotta make money somehow.

  • Dear Steve, What wonderful news for Americans being sucked into the traps of unethical debt settlement companies like Freedom Financial Network/Freedom Debt Relief. Just days ago I turned down another offer from them, they increased it by another $1000 and are claiming a fake success on one settlement! They would have had to ask us for additional money to fulfill the settlement. I am followind all of your advice and to repair our credit and how to get a refund! Anyway, I am staying tuned to hear more from you on today’s exciting news. I appreciate you being there and a part of this. Keep writing, I am listening!!

  • Hi Steve,
    Glad you are there and certainly a time to celebrate a victory for the consumers. This regulation is a much needed one.
    I am PROUD to announce that New Era Debt Solutions will be the FIRST Debt Settlement Company in the county to comply with the ruling.
    By the end of the day we will be in full compliance of the ruling to help consumers as we have for the last DECADE!
    Alex Viecco
    VP/Co-Founder
    New Era Debt Solutions

  • Hey Steve,

    You better be careful. Some people might start to realize you are a real news man. 🙂 Thanks for the pics and keeping us informed. So the countdown has begun. I wonder how fast these debt settlement companies that can’t do business without charging huge fees upfront will start to bail on all their clients? Unfortunately many of them I fear will simply continue to milk their existing clients for monthly payments, until the expenses exceed the payment revenues and then they will just close shop.

    It is going to be a mess for a few years, but the debt help industry will be a lot better off once these scammers move on to something else. Unfortunately that is what is going to happen. They are just going to move on to ripping consumers off with another product.

    The lesson is that you just can’t regulate moral character.

    • I could not agree with you more Damon. It may take a while for most of these companies to phase out while taking consumers funds but hopefully only the ethical and reputable one will be left to truly help consumers.
      Alex

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