Business Models Debt Relief Industry

FTC Speaks Out a Bit More on Attorney Model Debt Settlement

In an article that appeared this morning on CNN, Evan Zullow from the FTC is quoted as saying:

Evan Zullow, an attorney in the FTC’s division of financial practices, said he’s aware that companies are looking for loopholes. The FTC, he said, is closely monitoring the industry to make “sure that what they’re doing actually meets the exception.”

Simply hiring lawyers and calling the debt-fixing company a law firm, for example, or meeting with customers at Starbucks to sign paperwork won’t cut it, he said. Settlement companies must give actual in-person sales presentations if they want to collect upfront fees, according to the FTC.

So for all those that are concerned over the debt settlement companies that might be trying to find a way around the FTC telemarketing sales rules regarding up-front fees for debt settlement sales, it clearly appears the FTC is on the job and watching.

And then it happened, as I was reading further down, the article actually mentions this site. Wow!

Debt settlement companies might also move their operations offshore to evade regulation. Steve Rhode, a consumer advocate and founder of Getoutofdebt.org, a website providing debt relief advice, published slides from a presentation that The Association of Settlement Companies, a debt settlement industry group, gave at a recent industry conference.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.


I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

See also  The Debt Settlement Attorney Model Podcast



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.

22 Comments

  • I think I’ll go over to loan modification forum for a while and give everyone my opinion. I don’t have any interest in it, but i’m entitled to give it.
    Ive been in this business a long time. I am in the trenches. My company (again) is 1 in a thousand that never charged up front for our work. I watched all the settlement companies and their affiliates get rich while helping maybe 10% of their clients. I watched them grow their phone rooms as they collected those hefty up front fees into very large rooms. I spoke to potential clients and told them the truth while they were being lied to by every other company we came across.
    The new FTC rule is in place to insure that clients get value for their dollar. When they paid up front and things got worse & missed a payment, they lost all their money. When things got better & they no longer needed the service, they lost all their money. When they stayed the same & had NO money saved after 18 months, they had nothing to offer & got sued without the ability to negotiate & lost all their money.
    We graduate 80% of our clients. And those that fall out get their money back. Every dime. If a potential client did not fit our program because they had too little income, should file for bankruptcy or were too well off, we told them they did not need our help. We watched while your friends at Legal “Helpers” magically fit everyone into their program.
    How dare you come to this board and tell me or the like minded companies that ARE interested in the truth, and who are interested in exposing the bad players & keeping a needed industry available to people in debt what you think? Those of us on this board unfairly wear a black eye in this industry because of those very bad companies. Now you, who admits you have no interest here, are going to support a company that has demonstrated they could less about their own clients? If Legal Helpers was interested in helping their clients they would offer their services on contingency. The problem with not getting paid up front, though, is that without that money you can not pay affiliate sales office 70% of the client fee to sell your program. When a law firm has affiliate sales rooms who they pay that much money to, that is an indication of a defect in the program. Lawyers can not split fees with non lawyers. How is it LHDR can be practicing law and paying 70% out to affiliate sales companies? There’s more- My guess is they are likely also violating Model Rules Of Professional Conduct for State Bars under these too: 1.2, 1.3, 1.4, 1.5, 1.7, 1.15, 5.3, 5.5, 7.1(b)(2), 7.2, 8.4(3), 8.4(4).
    Until you’ve walked a mile in our shoes, why don’t you keep your ignorant opinions to yourself? If you truly have no interest here, leave. You have no truth to tell because you have no experience.

  • I think I’ll go over to loan modification forum for a while and give everyone my opinion. I don’t have any interest in it, but i’m entitled to give it.
    Ive been in this business a long time. I am in the trenches. My company (again) is 1 in a thousand that never charged up front for our work. I watched all the settlement companies and their affiliates get rich while helping maybe 10% of their clients. I watched them grow their phone rooms as they collected those hefty up front fees into very large rooms. I spoke to potential clients and told them the truth while they were being lied to by every other company we came across.
    The new FTC rule is in place to insure that clients get value for their dollar. When they paid up front and things got worse & missed a payment, they lost all their money. When things got better & they no longer needed the service, they lost all their money. When they stayed the same & had NO money saved after 18 months, they had nothing to offer & got sued without the ability to negotiate & lost all their money.
    We graduate 80% of our clients. And those that fall out get their money back. Every dime. If a potential client did not fit our program because they had too little income, should file for bankruptcy or were too well off, we told them they did not need our help. We watched while your friends at Legal “Helpers” magically fit everyone into their program.
    How dare you come to this board and tell me or the like minded companies that ARE interested in the truth, and who are interested in exposing the bad players & keeping a needed industry available to people in debt what you think? Those of us on this board unfairly wear a black eye in this industry because of those very bad companies. Now you, who admits you have no interest here, are going to support a company that has demonstrated they could less about their own clients? If Legal Helpers was interested in helping their clients they would offer their services on contingency. The problem with not getting paid up front, though, is that without that money you can not pay affiliate sales office 70% of the client fee to sell your program. When a law firm has affiliate sales rooms who they pay that much money to, that is an indication of a defect in the program. Lawyers can not split fees with non lawyers. How is it LHDR can be practicing law and paying 70% out to affiliate sales companies? There’s more- My guess is they are likely also violating Model Rules Of Professional Conduct for State Bars under these too: 1.2, 1.3, 1.4, 1.5, 1.7, 1.15, 5.3, 5.5, 7.1(b)(2), 7.2, 8.4(3), 8.4(4).
    Until you’ve walked a mile in our shoes, why don’t you keep your ignorant opinions to yourself? If you truly have no interest here, leave. You have no truth to tell because you have no experience.

  • I think I’ll go over to loan modification forum for a while and give everyone my opinion. I don’t have any interest in it, but i’m entitled to give it.
    Ive been in this business a long time. I am in the trenches. My company (again) is 1 in a thousand that never charged up front for our work. I watched all the settlement companies and their affiliates get rich while helping maybe 10% of their clients. I watched them grow their phone rooms as they collected those hefty up front fees into very large rooms. I spoke to potential clients and told them the truth while they were being lied to by every other company we came across.
    The new FTC rule is in place to insure that clients get value for their dollar. When they paid up front and things got worse & missed a payment, they lost all their money. When things got better & they no longer needed the service, they lost all their money. When they stayed the same & had NO money saved after 18 months, they had nothing to offer & got sued without the ability to negotiate & lost all their money.
    We graduate 80% of our clients. And those that fall out get their money back. Every dime. If a potential client did not fit our program because they had too little income, should file for bankruptcy or were too well off, we told them they did not need our help. We watched while your friends at Legal “Helpers” magically fit everyone into their program.
    How dare you come to this board and tell me or the like minded companies that ARE interested in the truth, and who are interested in exposing the bad players & keeping a needed industry available to people in debt what you think? Those of us on this board unfairly wear a black eye in this industry because of those very bad companies. Now you, who admits you have no interest here, are going to support a company that has demonstrated they could less about their own clients? If Legal Helpers was interested in helping their clients they would offer their services on contingency. The problem with not getting paid up front, though, is that without that money you can not pay affiliate sales office 70% of the client fee to sell your program. When a law firm has affiliate sales rooms who they pay that much money to, that is an indication of a defect in the program. Lawyers can not split fees with non lawyers. How is it LHDR can be practicing law and paying 70% out to affiliate sales companies? There’s more- My guess is they are likely also violating Model Rules Of Professional Conduct for State Bars under these too: 1.2, 1.3, 1.4, 1.5, 1.7, 1.15, 5.3, 5.5, 7.1(b)(2), 7.2, 8.4(3), 8.4(4).
    Until you’ve walked a mile in our shoes, why don’t you keep your ignorant opinions to yourself? If you truly have no interest here, leave. You have no truth to tell because you have no experience.

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