Get Out of Debt Guy - Steve Rhode

Credit Counseling Agencies Challenge FTC to Take Agressive Action Against Debt Settlement Companies for Violating Telemarketing Sales Rules


The following letter was sent to the Federal Trade Commission:

December 13, 2010

Federal Trade Commission
Office of the Secretary
Room H-135 (Annex T)
600 Pennsylvania Ave, NW
Washington, DC 20580

Re: Debt Settlement Company Evasion of Amendments to TSR

Dear Commissioners,

We are writing to speak out against the deceptive tactics employed by a growing number of debt settlement companies intent on evading the Federal Trade Commission’s recent amendments to the Telemarketing Sales Rule (TSR) that you issued to protect consumers. We are also urging that immediate action be taken to curb the activities of these companies.

We all applaud the amendments made to the TSR, as well as the enforcement actions announced on December 6th. We also recognize that some debt settlement companies have made an effort to comply with the revised rules. It must be noted, however, that many more companies have chosen to ignore the new rules and the authority of the FTC itself. We strongly believe that more aggressive monitoring of the settlement industry and enforcement of the TSR rules are needed to halt the continuing abuses of settlement companies that are preying on vulnerable consumers looking to resolve their financial problems.

The professional non-profit credit counseling agencies we represent speak with thousands of financially stressed consumers every day, providing free education and meaningful solutions to their problems. We know the kinds of challenges people are facing as they try to make ends meet. Being scammed out of the little money they have available to pay their debts must stop.

A few schemes used to avoid the new TSR rules appear to be gaining in popularity. Here’s how they work to deceive unsuspecting consumers:

We recognize that the burden of protecting consumers rests not only on the FTC, but also on state regulatory bodies and law enforcement agencies. Without a focused, committed, and coordinated response by authorities, the flaunting of the FTC’s regulations will continue and consumers will suffer.

Accordingly, we, the undersigned, call for the following:

  1. That the FTC launch a new investigation into the on-going fraudulent conduct of the debt settlement industry in order to expose the worst offenders and compile evidence of the full range of regulatory evasion tactics.
  2. That the FTC obtain injunctions against the offending settlement companies in order to protect consumers.
  3. That the FTC coordinate with attorneys general to ensure enforcement at the state level.

We are hopeful that prompt action can be taken. Consumers facing financial hardship cannot afford – emotionally or monetarily – to be abused by those who pretend to offer relief.


Christopher Viale
President & CEO
Cambridge Credit Counseling

Diane Chen
President & CEO
Consumer Education Services, Inc.

Tom Coates
Executive Director
Consumer Credit of Des Moines

Russell Graves
Executive Director
Consumer Credit and Budget Counseling

Kevin Porter
Alliance Credit Counseling, Inc.

Hank Keaton
President & CEO
American Financial Solutions

Sam Hohman
President & CEO
Credit Advisors Foundation

Alan Franklin
American Credit Alliance, Inc.

Michael McAuliffe
Family Credit Management

Barry Coleman
Compliance and Project Manager
ClearPoint Financial Services

Geri Napolitano
Debt Counseling Corporation



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