The United States Organizations for Bankruptcy Alternatives (USOBA) trade association has just made the following announcement. Smart move.
The United States Organizations for Bankruptcy Alternatives (USOBA) strives to establish industry standards for its membership that both benefit debt settlement companies and protect consumers. We have worked hard in Washington and in the states to educate legislators and policymakers about the debt settlement industry. Such efforts are dedicated to promoting balanced legislation and regulations that provide needed consumer protections, while not creating regulatory burdens that make it impossible for companies to survive and provide quality services.
We are excited to promote a model that we believe achieves both of these goals. After careful review of feedback from The Federal Trade Commission (FTC) coupled with various interpretations of the FTC’s amendments to the Telemarketing Sales Rule (TSR) for debt settlement companies, it is USOBA’s decision to help our current and future member companies operate at the highest standards of the industry. With this comes a decision that USOBA will limit acceptance of new and renewing applications to companies that only collect fees as outlined in the FTC TSR. We believe this move will help the industry grow and prosper and curtail any future negative legislative and regulatory attacks. As Sam Brunelli, our Lobbyist in Washington says, “It it important to play by the rules, it builds your credibility as an industry as we work to improve the regulatory environment.”
While we stand firm in our belief that the FTC likely overreached their authority in regulating fees for debt settlement companies in the TSR, it is now the law. Preliminary data from several USOBA members indicate that this new business model will have positive effects on this industry. Specifically, data obtained from companies currently implementing an after settlement fee model indicate there are many positive results with regard to profitability, creditor relations and customer satisfaction. We have always acknowledged that there are some bad actors in our industry, and we are all living with the consequences of the regulatory backlash created as a result of these bad actors.
That said, under the new regulatory framework, with the ban on advance fees, consumers receive a high level of protection from fraudulent companies or companies promising unreasonable results and expectations. This transition in our policies will position USOBA members to be recognized as the best and most trustworthy in the industry.
This change in policy positions USOBA to continue having a strong and powerful voice in Washington. It will offer a measure of protection against negative legislation in the future and keeps open the doors we have already opened from policy makers who desire to protect jobs and small businesses.
We will implement policy changes effective December 10th, 2010. Current members will be affected as their membership agreements expire, and all companies must show proof of compliance prior to renewal. USOBA will honor current contractual agreements with its members, and offer assistance in helping our members make the transitions. For those members who do not desire to comply with this new policy, USOBA’s staff will process cancellations upon request. An in depth description of changes and requirements will be provided on or before December 10th. You will notice, USOBA has streamlined many of its requirements and processes in order to make renewal and joining as effortless as possible.
USOBA is thrilled to be the association that leads our industry into its new and promising future, and we hope each of our loyal member companies will share our vision and join us in our efforts to grow and improve this great industry we have fought so long and hard for! The Debt Settlement Industry is providing real world solutions to Americans at one of the most challenging times in our nation’s history. Together we can continue helping Americans get back on their feet while avoiding bankruptcy.
With sincerest appreciation and thanks!
The USOBA Team