Debt Relief Industry

Credit Counseling Group Makes Presentation to FTC About Cracking Down on Bad Actor Debt Settlement Companies

I’ve obtained a copy of the presentation that was made to the FTC about debt settlement companies that are trying to evade the FTC telemarketing sales rules which in turn lead to consumer harm.

It was interesting to see so many images from this site used since I had nothing to do with the presentation, but hey, I have reported on those issues. It was nice to see they reported on the new good guys and listed the Rally in Raleigh meeting I held.

Sincerly,
Steve

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READ  Debt Network USA Setting Off to Offer Face-to-Face Debt Settlement Presentations



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.

10 Comments

  • Reading this piece for the first time triggered real anger me. Following up on this story I decided to look into the originator only to find several things on the Cambridge site, as well as others, i.e. the NFCC’s site I find just unbelievable. While it’s quite clear Debt Settlement has impacted the CCC and bankruptcy world in terms of revenue and profit, more clearly the loss thereof, I think this particular provider (Cambridge) show very little regard for the good players based on actions evident on their website and here on this forum. I was snooping around Steve’s site to find out if there was any discussion on the subject of statistics regarding CCC’s and while Steve ran into a brick wall with most, Cambridge did offer up some stats that were unimpressive to say the least. While the info is sketchy here are just a few examples from June 2009:

    The NFCC stonewalled Steve, why? Conclusion, the data stinks!
    Cambridge numbers as per Steve site; 27% completion rate, what happen to the other 73%? What amount in fees did they pay Cambridge before dropping out? Did they satisfy any of their creditors? Did anyone receive a refund of fees?

    I decided to look into the education a typical Certified Credit Counselor must deal with and the test one takes to claim the certification title, let me tell you all, it’s such a joke! $300 – $400 a little studying and a 100 question, multiple choice, online test and you too can become a Certified Credit Counselor.

    The ax I’m grinding here is not specifically with the CCC industry but with the broad stroke of a brush some of them paint the debt settlement players with. As an example, go to the Cambridge website and if you believe you’re one of the good guys in DS, what you will find will more than likely infuriate you.

    How about if we did the same thing? A big ugly red warning about the CCC’s and their unwillingness to divulge their stats;

    JOIN WITH A CONSUMER CREDIT COUNSELING GROUP AND YOU COULD BE ONE OF THE LUCKY ONES AND BE PART OF THE BIG 20% COMPLETION RATE. THAT’S RIGHT AMERICA, NEARLY 80% OF CONSUMERS THAT ENROLL IN A DEBT MANAGEMENT PLAN DROP OUT AND STILL GET HIT WITH FEES. WILL YOU BE ONE OF THE LUCKLY ONES”? DON’T THINK FOR A SECOND THAT BECAUSE MOST CONSUMER CREDIT COUNSELING ORGANIZATIONS ARE NON-PROFIT DON’T EARN BIG MONEY! AND GUESS WHAT, IF YOU MAKE IT, YOU WILL HAVE PAID BACK 100% OF WHAT YOU OWED ON THE CREDITORS TERMS, ALL THE WHILE DESTROYING YOUR CREDIT PROFILE!

    I’m pissed off as you can see, so I have decided to get my certification as a CCC and I will keep everyone who has an interest up to speed on how ridiculously easy it is to complete. By the way I think the power point/slide show was poorly done!

    Michael Reilly, CDS
    Emerge America

  • I think that it is too tempting for the advance fee model companies to deliver a lower quality product. Not intentionally, but once you have been paid before you do the job, let’s face it…Where is the motivation. Not to mention the fact that many companies were paying out so much in commissions that the truth was the goal of actually settling debt was not there. How could it be when companies were offering as much as 80-90% of the fee as a sales commission.
    I know we have always kept our settlement group motivated by making sure they got the best deals they could for the consumer. I guess being a dinosaur might be a bad thing for some. I like to look at it as a Traditionalist.
    Let’s face it. We are all consumers. I like to live by the Golden Rule- Treat others as I would like to be treated, so far in my life, business and relationships it has worked well.
    Thanks
    Alex Viecco

    Alex Viecco

  • This blows my mind..great info Steve. I really enjoy your site. Reading this has secured its game over very soon for all runners in my opinion..Alex, youre a dinosaur and started in the business when leads were $4 ( not exactly ) but cheap and minimal saturation. I sold debt settlement in the 90’s and it wasn’t as difficult and had alot less competition. You built up such a strong client base (residual) and SOP that you didn’t need to adjust when the industry grew x 50. The advanced fee structure isn’t necessarily a horrible model. However, if the fee’s are too high or captured too soon, failure is the result for the consumer. I am glad to see that the industry is moving toward legitimate. The % of savings model is proven, bottom line..Alex, I would have to imagine youre growing your company out considerably? Bravo, you made it… The cowboys are dying.

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