Debt Relief Industry Regulation / Legislation

Loeb & Loeb to Debt Settlement Industry, Loopholes or Nooses: Be Careful Where You Stick Your Neck

Apparently the law firm of Loeb & Loeb put out a presentation recently to provide some last minute guidance to the debt settlement industry. You’ve got to love the title, “Loopholes or Nooses: Be Careful Where You Stick Your Neck”

On the subject of selling bundled products with debt settlement services in order to increase income.

On the issue about using the internet only and avoiding the use of the telephone will help debt settlement companies avoid the telemarketing sale rules put forward by the FTC.

On the issue that debt settlement companies that comply with the law still have significant opportunities.

About why debt settlement companies should comply with the new telemarketing sales rules that will go into effect on October 27, 2010.

FTC TSR compliance can open new doors if debt relief companies will play by the rules.

For more information or assistance from Loeb & Loeb contact:

Michael L. Mallow
[email protected]
(310) 282-2287

Michael A. Thurman
[email protected]
(310) 282-2122


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  • Fees payable to Debt Settlement Companies can only be cut from the Settlement Function (upon settling a debt) after Oct. 27, 2010. Specifically/when NW sends out the settlement check to the Creditor/Collection Agency, N.W. will electronically credit the Debt Settlement Company bank on file. Note World is eliminating the (up front) Program Fee Function upon enrolling new clients.

    NW doesn’t gain interest off these accounts. They’re also eliminating 5 of their other b.s. “grey area” fees, nsf’s cbp, etc.. However they still will collect the $12.50/mo service fee. (which is upfront)

    What strikes me as odd, is N.W. claims this $12.50 monthly fee is ok b/c they are an independent 3rd party so they’re TSR exempt. But if they are truly independent, than let the DS companies do what thou wilt under the law and let the law handle it. However they’re not leaving it up to DS companies to decide if they’re exempt or not from the TSR b/c they don’t want to be caught aiding and abetting. So is N.W. aiding & abetting or are they truly an independent participator? If they’re aiding and abetting, then they should also cut the upfront $12.50 monthly fee along with the Upfront Fee, like they will. If they’re truly an independent 3rd party, then they should do as the DS companies instruct them to do. Make up your minds NW.

    (I know what you are thinking) {don’t all d.s. companies have to eliminate their advance fee}… but it’s a simple fact that not all companies under NW will be effected by the TSR. I say let the market decide, although State AG’s are soon to fill in the intrastate cracks I believe.

    I suspect the liability and risk is just too much for NW to be caught as aiding and abetting, so they’re painting a broad brush stroke to mitigate the risk. But they simply won’t be able to survive if they don’t charge $12.50/month beyond several months. It’s the lesser of two evils.

    Coincidentally it’s actually more profitable under the new TSR to run a non-profit D.S. Company in CA now than a For Profit D.S. Company in CA.

    This new rule is classic over-reaction.

  • NoteWorld Adhering to FTC Regulation
    October 20, 2010 :: Linda Remsberg
    NoteWorld has spent the last three months reviewing the various interpretations of the Federal Trade Commission’s new regulations regarding the debt settlement industry. After careful consideration it is NoteWorld’s decision to only provide payment servicing for new consumers in debt relief programs where fees are charged or collected after debt relief services have been provided as described by the FTC. This policy adheres to NoteWorld’s promise to rigorously comply with regulation for our customer’s protection.

    Effective October 27, 2010, we will adhere to the advance fee ban by no longer accepting new accounts from programs which charge debt relief service fees prior to settlement. Our servicing of payments for accounts boarded with us prior to October 27, 2010, will not be affected.

    As a money transmitter NoteWorld will gladly continue to process payments for other products and services while providing the same high level of service.

    NoteWorld believes that adhering to the advance fee ban will open up the market for your company’s services to millions more consumers and be very profitable for your business going forward.

    We invite you to join NoteWorld’s VIP Club where you will have exclusive access, at no additional charge, to quarterly updates on NoteWorld research on debt settlement demand, NoteWorld’s Market Research Notes on industry trends and a quarterly diagnostic report on your consumer portfolio.

    NoteWorld is here to support you and your consumers today and, by assuring compliance with the FTC regulations, we will be here to support you in the future. Source –

  • Mero, can you explain in details what you mean by that. What’s considered advance fee for Note World? Are they switching to a fully dedicated SPA for the client side only? or does the company enrolling these clients can still upload the SPA accounts for the consumers? I wonder since the TSR ruling these clients must have their own dedicated account where they have full control and any additional interest earned is theirs. If that is the case how is the company servicing these clients be paid? Is Noteworld going to transmit the part of the clients monies to pay for fees serviced? Or the client has to cut the company the check after the settlement has been reached?

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