Business Models Debt Relief Industry

Debt Settlement Attorney Firm Recruits Employees Saying New Laws Don’t Apply to Them

The following email exchange was sent to me from a guy that saw an advertisement for a debt settlement job. I think you will either start laughing at the section I bolded or slap your head in disgust.

I’ve changed the names of the people in the email and I’m not going to tell you the name of the company. But here is the email exchange between the potential debt settlement sales rep and the company.

Message 1

From: Potential Sales Rep
To: Debt Settlement Company

How are you going to stay in business when the new FTC rule banning upfront fees goes into effect in few months????????????

Answer me that please before I send resume.


Message 2

From: Debt Settlement Company
To: Potential Sales Rep

We don’t operate with a lawyer, we operate underneath a lawyer/firm. We have a unique alliance we formed some time ago, and because of the way our legal model is structured we are not directly billing the clients. If you are familiar with the rules/regulations, you know that a debt settlement company can not charge up front fees however, a law firm can. To answer your question, we are covered from a legal perspective.


Message 3

From: Potential Sales Rep
To: Debt Settlement Company

“The FTC is concerned with attorneys in connection with debt relief services. Based on the record in the rulemaking, the Commission decided that an exemption from the amended rule for attorneys engaged in the telemarketing of debt relief services “is not warranted.” The FTC offers several reasons for its decision, including that:

[I]n general, attorneys who provide bona fide legal services do not utilize a plan, program, or campaign of interstate telephonic communications in order to solicit potential clients to purchase debt relief services. Thus, an attorney who makes telephone calls to clients on an individual basis to provide assistance and legal advice generally would not be engaged in “telemarketing.”

In addition, the FTC states that “it is important to retain [TSR] coverage for attorneys, and those partnering with attorneys, who principally rely on telemarketing to obtain debt relief service clients, because they have engaged in the same types of deceptive and abusive practices as those committed by non-attorneys.” The FTC also states that its decision to not grant an exemption to attorneys from the Final Rule is consistent with the existing scope of the TSR and several other statutes and FTC rules designed to “curb deception, abuse and fraud.”

You are still subject to the TSR amendment and the only way I think the law firm can charge upfront for this is if they meet with “in person” each client-not possible, so the only way it’s feasible is if either of you telemarket, and then your both subject to TSR amendment.

Anyway it’s very deceptive, the FTC is watching for schemes to get around it, and even if technically legal now, it will not last-IMO.

Message 4

From: Debt Settlement Company
To: Potential Sales Rep


You appear to be of a higher intellect, and since you know so much about the laws pertaining to debt settlement, I would recommend another occupation. Obviously, you are familiar with the rules and I feel like you are on a futile effort to find a job.


Message 5

From: Potential Sales Rep
To: Debt Settlement Company

Thanks, I too agree that I’m on a “higher intellect” after your last email. Your welcome for educating you as well about a the rule that you obviously don’t understand, even more amazing since it’s rule that affects you and will put you out of business……and you don’t even see it, LOL! I had no intention of applying for your job or any, I was just amused by your ridiculous and deceptive job ad.

Also, typical you respond like a child since you have no answer or rebuttal for my last email and got “owned” shall we say.

Good luck with your scam/sham/deceptive operation there pal!


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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.

1 Comment

  • Isn’t it sad to see what all of these companies are telling their sales people. Most of these people are going to be out of a job and these guys, don’t even have enough decency to let them know that the ship is going down. They are pumping their pom poms all the way to the end. Isn’t going to surprise me if many of these guys don’t even get their final paychecks when these people decide to cut and run. Most will leave their employees and their clients hanging. There is no question.

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