Debt Relief Industry Regulation / Legislation

USOBA Sends Out Message to Members. Beware of Loopholes.

An amazing tipster (send in your tips here) just sent me an email that USOBA sent out this morning to members. I’ll let you be the judge but I think the email indicates USOBA has finally thrown in the towel on the Federal Trade Commission Telemarketing Sales Rules battle.

If we can take the email at face value, it really is good sound advice and if USOBA really means it, good on them.

The USOBA team highly advises all of our members to be cautious of these new business models, and we strongly encourage all members to check with their legal counsel before moving in any direction.

The downside is that this probably is the hinge point at which a vast number of debt settlement companies and their affiliates will go out of business.


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Dear USOBA Member,

In light of the Federal Trade Commission’s amendment to the Telemarketing Sales Rule, there have been many discussions among industry professionals about possible exemptions, or loopholes to the amendment. The USOBA team has noticed a high number of emails sent from different vendors to debt settlement companies regarding new FTC compliant business models. The USOBA team highly advises all of our members to be cautious of these new business models, and we strongly encourage all members to check with their legal counsel before moving in any direction.

We understand that this amendment has the potential to greatly affect the debt settlement industry and finding exemptions and loopholes in the ruling could protect your revenue stream. However, the USOBA team wants to stress that these loopholes could be potential traps for companies. Debt settlement companies should be wary when pursuing marketing programs or business models based on such loopholes. For these reasons, we are warning industry professionals to avoid jumping at the promise offered by a loophole – consult your legal counsel immediately before making any changes to your business models.

READ  Tax Relief Providers Get Temporary Pass Under FTC TSR Effective Today

Below are some of the common business model changes that companies should be wary of:

  • Changing to a Non-Profit Business Model
  • Intrastate Telephone Calls
  • The “Face-to-Face” Exemption
  • “Internet Only” Transactions
  • “Attorney Model” Transactions

For more information about these models, click below to see a report from Loeb & Loeb, LLP attorneys, Michael A. Truman and Michael Mallow.

Companies should carefully consider a business model that complies with the FTC’s advance fee ban. Several of our members have already implemented new business models that comply with the FTC rulings. For more information about FTC compliant business models please contact us at [email protected]

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

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.


  • I am shocked. TASC and USOBA finally flip flop after they have no other play left. I am sorry, did USOBA say that a few of their members have successfully implemented models that comply with the new rules? How is that possible? Up until this week the talking points coming out of USOBA was that it was impossible to run a company like that. Hmm, so were they lying to consumers and regulators this whole time, or did they recently take some business classes and figure out that it was actually possible to deliver a service without having to rip off 90% of their clients to help the other 10%. Where did Ansbach and his Pom Poms go? He was telling all the regulators that this was impossible. Has anyone called him to let him know of the new developments?

    Sorry I call bullshit on both TASC and USOBA. “We were against it but now we are for it because what else are we supposed to do?”

    Damon Day’s Last Blog Post: Time to Boycott all Tasc and Usoba Members, The Emperor has No Clothes

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