In one of the more commendable moves that The Association of Settlement Companies has undertaken they have issued the press release below publicly stating they will abide by the new FTC rules.
Guys, you did the right thing. It was the only move to make.
Except for the last minute whinging in the release, you took it like a man. Your actions have now hopefully made the implementation of the Debt Settlement Consumer Protection Act less necessary at this point and more importantly helped to save members from defecting.
Hopefully you will now issue guidance to members that avoidance of the rules will not be tolerated by TASC. You know, things like setting up shop overseas, avoiding the use of the phone, or hiding behind an attorney model.
I reached out to USOBA for a public comment regarding the TASC action and acceptance of the FTC rules.
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TASC Press Release
WASHINGTON (August 17, 2010): The Association of Settlement Companies (“TASC”) announced today that its Board of Directors has voted to support the recent debt relief services rulemaking by the Federal Trade Commission (“FTC”). In addition to mandating enhanced disclosure requirements modeled on current and proposed TASC standards, the FTC rulemaking prohibits debt settlement companies from accepting fees from a consumer for debt settlement services prior to the actual settlement of the consumer’s debt.
“We recognize that the Federal Trade Commission attempted to strike an appropriate balance between improving consumer protections and ensuring continued viability for the majority of ethical, well-managed debt settlement companies,” said Robby H. Birnbaum, President of TASC. “Debt settlement companies are the only truly independent voice for the consumer when dealing with overwhelming levels of consumer debt and we are pleased that the FTC recognized that debt settlement is not only an appropriate alternative but also a necessary service when delivered by a legitimate debt settlement services provider.”
Birnbaum noted that TASC has been working for more than a year with the FTC to craft appropriate program disclosures and observed that many of the FTC’s proposals were modeled on TASC disclosure standards.
“The only significant difference between TASC and the FTC,” Birnbaum said, “was the proposal that the collection of fees be delayed until debts are actually settled, a position that, we believe, ignores the fact that services are provided throughout the customer life cycle, not just at the time of settlement. TASC proposed, and continues to believe, that a less intrusive and equally consumer-protective solution would have been to mandate a full refund policy, backed up by a surety bond. However, after much discussion, both internally and with regulators, consumers and other interested parties, we have determined that the FTC’s position of tying fees to performance is an acceptable way of ensuring that consumers actually get what they pay for and expect.”
Andrew Housser, a TASC Board member who was very involved in the FTC comment process said, “While the rule provides a significant capital challenge to our industry, we are pleased that at least a few of our comments were heard and reflected in the final rule – these changes allow good companies that are getting results for consumers a fighting chance to continue as viable businesses.” He added, “While managing working capital will be tough for the industry, we think it is time to accept these rules and get back to the business of helping consumers get out of debt.”
Birnbaum went on to state, “TASC appreciates the efforts that the FTC expended to educate itself about the industry. We believe that the process that we went through with the FTC will foster more open communication among our organization, our members and the Commission. We hope that TASC’s cooperation and acceptance of the FTC’s new rule will reinforce the message that TASC believes strongly in its mission of helping the millions of Americans who find themselves struggling with unmanageable levels of credit card debt.” – Source
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Well, I guess when they were handed a check mate they had no choice. Excuse my cynicism, but these guys were completely against this yesterday and now they are for it? What kills me is that they still don’t get it. It is about protecting consumers and all they care about is protecting themselves.
They tell you what is important to them right in the release. They still can’t get it through their thick heads that front loaded fees hurt consumers, not just because of the fact that they are paying for a service they aren’t getting, but mainly because front loaded fees mean it will take longer to settle their debts and they will be more likely to get sued.
These laws are there to protect consumers from these debt settlement companies that don’t seem to really understand the concept of how debt settlement actually works. Their solution is to have a mandatory refund policy with a performance bond. How does that allow consumers to settle debt faster? IT DOESN’T. THEY DO NOT CARE ABOUT HELPING CONSUMERS. They couldn’t be more obvious about their intentions if they tried.