A debt settlement company has forwarded me the following email pitch they received from a face-to-face meeting company. These companies are acting as agents of debt settlement companies in order “to satisfy the FTC’s face to face TSR exemption,” so some debt settlement companies can continue to collect large up-front fees from consumers.
The Email Pitch
Thank you for taking the time to discuss [face-to-face representation] services today. We provide a centralized and integrated approach for debt settlement operations in need of a nationwide network of agents to meet face to face with their customers to satisfy the FTC’s face to face TSR exemption.
Our flexible and individualized services on a local level improve customer confidence and communication in addition to satisfying the TSR exemption. Our [face-to-face representative] agents complete a comprehensive training program that includes details of the debt settlement industry and best practices in communications and presentations. We utilize sophisticated software for electronic referrals, timeline tracking and reporting for the benefit of our face to face agents and clients.
We have a streamlined process with our clients that ensures timely presentations. The exact steps are included in our client agreement which will be provided to you if you are interested in signing up for our services.
We charge $150 per presentation. If your customer does not show up at the designated time and place we charge a cancellation fee of $100. If you cancel your referral prior to one of our agents being physically dispatched to a meeting place we do not charge a cancellation fee.
If you are currently using another service provider for your face to face solution and are satisfied with their quality of work and pricing we would appreciate the opportunity to be a backup resource.
Our teams goal is to increase the integrity of the services provided by our Debt Settlement Operation clients.
If you have any specific questions regarding our services please feel free to call me any time on my cell phone at [Redacted]. If you are interested in utilizing our services we have a quick survey for you to complete and then we will provide you with a service agreement.
What I find interesting about the pitch is that it appears the representative company feels that it is merely the face-to-face meeting with an agent that make this an event to satisfy the FTC TSR exemption. That’s not quite what the FTC has said on this issue.
The FTC has said:
The key to the face to face exemption is the direct and personal contact between the buyer and the seller. If you have face to face sales presentations with consumers before signing them up or accepting any fees, then you’ll qualify for the face to face exemption.
On the other hand, you can’t get out of the rule by hiring people to have cursory pre-enrollment meetings with consumers before signing them up.
And in our recent Rally in Raleigh meeting, Allison Brown from the FTC made it very clear what her view of the face-to-face exemption is, and from the way I see it, agent representation isn’t even close. Start watching at 4:40 for the key information related to face-to-face meetings.
So I wondered if the face-to-face company is the entity that is making the initial and full sale presentation and no sales presentation has been made by a company prior to that meeting?
That question was answered for me by a legally recorded call that was forwarded to me by one of the debt settlement companies who has been approached by this face-to-face company I am writing about today.
In the call, the face-to-face company owner says the role of the debt settlement company, prior to scheduling the face-to-face meeting, is to have explained thoroughly the services, has provided all the information including the risks and the benefits, and has gone through the exact program with them.
The face-to-face company said in order to satisfy the face-to-face solution they would work with the debt settlement company in the development of a presentation. The presentation would be 10-15 minutes and include pros and cons.
So after the debt settlement company presentation, if the consumer is interested in proceeding with closing the sale and signing up with the program, the face-to-face agent will be scheduled to meet with the consumer.
On the call the debt settlement company asks to clarify what the job of the face-to-face company and agent is.
The debt settlement company says, “So you in essence would just get the signature and answer a few questions clients?” “Exactly,” is the response by the face-to-face company.
The face-to-face company says, “So once you have your client postured to where they want to move forward with executing the documents you would send us a referral via email.” They go on to say that at that point an agent would be scheduled to meet with the consumer.
That clearly sounds to me as if the face-to-face company knows the sale has primarily been made and the sending of an agent is merely an exercise in thwarting the FTC regulation intended to protect consumers.
“So you’re doing this so the [debt settlement] company that operates can go ahead and charge the up-front fee?”, asks the debt settlement company on the call. The face-to-face company responds and says, “Exactly, we take this very seriously and appreciate the risk in using the approach. The FTC has an intention in my mind to really eliminate for-profit debt settlement business.”
I contacted the company in the call.
I’m currently working on a story that involves [your company] and debt settlement sales.
I was hoping you could answer the following questions so I can include your side of the story.
I guess the issue at hand is if the debt settlement company has already made a sales presentation and the consumer is postured to where they want to move forward and then an agent is sent. That does not seem like it would comply with the TSR since the consumer was already sold on the program by the company prior to the face-to-face meting and then wants to move ahead.
In order to comply with the new FTC TSR are the face-to-face agents making the entire sales presentation and the company is not presenting any information prior to the sales presentation by the face-to-face agent appointment?
Or is the face-to-face agent just going to get the signatures and answer a few questions?
Despite have an email exchange with the company they have not provided any response to the questions asked by the time of publication. If this was all above board and legitimate, there should be no worry or hesitation in answering these question posed.
Based on the information learned for this article I would think any debt settlement company using face-to-face agents would have significant liability especially in light that the FTC has already said this issue is a prime enforcement issue for them. Conversely, any face-to-face company that is providing loophole services should be very aware of their role in a chain, of what the FTC feels is non-compliant activity, and be prepared to face a fine of $16,000 per occurrence.
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But what about us that actually provide a service that people want? We’re not preying on the weak. Some people are in bad financial situations, and need our help. I’ve saved my clients tens of thousands of dollars. And at the end of it all, they thank me.
But, I run a very small operation, and haven’t charged any upfront fees for 7 months now. I’m almost broke, and will not be able to stay in business if I can’t find a way to at least charge something upfront.
The regulation should be a set amount, a percentage billed over time, not $0.00. With it at 0, in some cases, I do a lot of work and don’t get paid for over a year. How am I supposed to stay in business?
I know there’s been a few bad eggs out there, and that’s why these new rules came into affect. But there’s some of us that actually do our job and are very good at it. Just an hour ago, I closed a $24,500 Chase account for $5200, saving my client almost $20,000. How’s that a bad thing? I’ll gladly show you the settlement letter to prove it. Had my client paid that on his own at 19% APR, he would have paid over $60,000 and it would have took 20 years. He got it paid off in less than two years with me, and if you add the interest, I really saved him some where around $50,000. Please explain to me how that’s a bad thing?
The FTC should be attaking the credit card companies, not the debt management companies. The credit card companies charge more than loan sharks and get away with it every day.
But I guess they have more money to put towards lobbying and getting the laws writen the way they want them.
But what about us that actually provide a service that people want? We’re not preying on the weak. Some people are in bad financial situations, and need our help. I’ve saved my clients tens of thousands of dollars. And at the end of it all, they thank me.
But, I run a very small operation, and haven’t charged any upfront fees for 7 months now. I’m almost broke, and will not be able to stay in business if I can’t find a way to at least charge something upfront.
The regulation should be a set amount, a percentage billed over time, not $0.00. With it at 0, in some cases, I do a lot of work and don’t get paid for over a year. How am I supposed to stay in business?
I know there’s been a few bad eggs out there, and that’s why these new rules came into affect. But there’s some of us that actually do our job and are very good at it. Just an hour ago, I closed a $24,500 Chase account for $5200, saving my client almost $20,000. How’s that a bad thing? I’ll gladly show you the settlement letter to prove it. Had my client paid that on his own at 19% APR, he would have paid over $60,000 and it would have took 20 years. He got it paid off in less than two years with me, and if you add the interest, I really saved him some where around $50,000. Please explain to me how that’s a bad thing?
The FTC should be attaking the credit card companies, not the debt management companies. The credit card companies charge more than loan sharks and get away with it every day.
But I guess they have more money to put towards lobbying and getting the laws writen the way they want them.
“Is there no end to the idiotic things unscrupulous people will do to take a buck from struggling consumers?”
Damon: Unfortunately this is nothing new. When it comes to making money, there will always be individuals and companies who prey on the weak (and uninformed). This is how illegitimate companies survive. And there are very few legitimate ones in the debt-relief industry.
Well I for one hope a lot of settlement companies who are looking for loopholes will sign up for this service. Then the FTC can go after the face to face company and in doing so get their hands on a client list and then go after the individual debt settlement companies who would prefer to cheat consumers out of their money than provide a beneficial service.
These guys will really help the FTC figure out who to go after.
Is there no end to the idiotic things unscrupulous people will do to take a buck from struggling consumers?
Well I for one hope a lot of settlement companies who are looking for loopholes will sign up for this service. Then the FTC can go after the face to face company and in doing so get their hands on a client list and then go after the individual debt settlement companies who would prefer to cheat consumers out of their money than provide a beneficial service.
These guys will really help the FTC figure out who to go after.
Is there no end to the idiotic things unscrupulous people will do to take a buck from struggling consumers?
“Is there no end to the idiotic things unscrupulous people will do to take a buck from struggling consumers?”
Damon: Unfortunately this is nothing new. When it comes to making money, there will always be individuals and companies who prey on the weak (and uninformed). This is how illegitimate companies survive. And there are very few legitimate ones in the debt-relief industry.