Debt Relief Industry In The News

CareOne Jumps on Bandwagon with Credit Counseling Request for FTC to Take Action Against Rogue Debt Settlement Companies

A pretty smart move by CareOne. See press release below.


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CareOne Expands On Push to Close Debt Settlement Loopholes

Columbia, Md. (December 16, 2010) – CareOne Services Inc. is adding its support to an effort launched December 15th by 11 nonprofit debt relief providers seeking more aggressive enforcement of the Federal Trade Commission’s recently amended Telemarketing Sales Rules. However, the concerns raised by the nonprofits in their open letter to the FTC obscure the biggest threats to consumers that must also be addressed.

The additional loopholes that need to be addressed include:

  1. Ensure that regulations apply to all debt settlement providers, regardless of tax status. Approximately 85 percent of the debt relief industry is comprised of nonprofit companies who are exempt from the FTC rules.
  2. Require that debt settlement providers not operate as “dual agents” by being compensated by both consumers and credit card companies. Under the current practice in the nonprofit industry, companies are allowed to charge consumers for services while also accepting payments from the credit card companies they are negotiating with.

“Many nonprofits, including agencies that are part of the current push for stronger enforcement of the FTC rules, are beginning to offer debt settlement services,” said Mike Croxson, president of CareOne Services. “Fixing these two loopholes, as well as the other concerns that have been raised, such as the use of text messages and online chats to communicate with customers, will ensure that all providers are acting in consumers’ best interests.”

CareOne has been a leading proponent of the FTC rules since they were first announced and supports aggressive enforcement of the rules. In August, CareOne asked the three leading nonprofit trade associations to voluntarily comply with the FTC rules. Although none of the associations agreed to that request, CareOne believes the current effort by 11 nonprofits is consistent with the views it has long championed.

For example, CareOne has consistently advocated that the practice of Fair Share needs to be more closely examined. Under Fair Share, nonprofit providers of debt management programs not only receive a fee for their services from the customer, but also receive payments from credit card companies for ensuring that bills are paid in full and on-time. In some instances, the payments from credit card companies can equal 50 percent of a nonprofit’s income. Payments like these can create a real conflict of interest in debt management programs, but that conflict becomes more pronounced as nonprofits move into debt settlement.

“How can companies say they are acting in a consumer’s best interest to settle their debt for less than they owe, while still accepting payments from the credit card companies?” Croxson said. “As long as these organizations are accepting Fair Share payments, their real motives will always be questionable.”

To help provide the scrutiny required of all members in the debt relief industry, regardless of tax status, CareOne has been a staunch supporter of the Consumer Financial Protection Bureau, which Congress created this summer and which will have the authority to regulate both for-profit and nonprofit providers.

“We agree that there are several bad players in debt relief and that there should be tough and enforceable laws to govern the industry and protect consumers,” Croxson said. “The new FTC rules and laws enacted by many states are a good first step. However, regulations must be put in place that will hold all companies to the same standards, regardless of tax status.”

About CareOne

CareOne Services Inc. is a debt relief company formed in 2002 to provide consumers with multiple solutions to complex money issues. CareOne takes a holistic approach to assisting customers in debt and reviews each situation to create achievable financial solutions. CareOne’s services include credit counseling, debt management, debt settlement, as well as free referrals to bankruptcy attorneys if that is in the best interest of the consumer.

CareOne also provides the CareOne Community (, a free online resource for consumers that includes educational tools, blogs and forums where more than a million people share their experiences and receive support from others in similar situations.

Headquartered in Columbia, Md., CareOne has helped more than 2 million people. In 2009, it provided consumers with the tools and assistance to pay down more than $294 million in debt. CareOne provides services in 41 states. For more information, call 1-800-373-3225 or visit

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See also  Big Changes Afoot for CareOne

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 enjoyed reading about these recommendations from Mike Croxson of Care One. This debt relief
    company seems to be a shining example of how a good debt relief company should be run.

    But I’m interested in knowing what the numbers were with CareOne for debt settlements before the FTC ruling in October of 2010 and what it is now. Can we contrast say May 2010 and May 2011. Can those stats be obtained?  
    Also curious as to whether they were doing the performance model before the FTC ruling. I did look
    through Steve Rhodes resources on this but did not see it. 


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