Debt Relief Industry In The News

Active Debt Solutions Addresses Tipster Issue

Active Debt Solutions, a member of the AACC, was the focus of an email sent in which said “I decided to dig up some dirt on the companies that Steve Rhode and his associates formed called the AACC. This is what I have found: – Active Debt is not licensed or bonded”

So I asked Active Debt for a response and here is what they had to say.

Active Debt Responds

This response comes from Sean Ryan at Active Debt Solutions:

First, let me say that I have to wonder what the AACC has done, as a whole to have someone take the time and effort to contact 50 states and regulatory bodies to check up on our companies! It’s a shame TASC never made such an effort.

Secondly, I will point out that the “tipster (send in your tips here)” includes nothing regarding any evidence of a consumer complaint or any harm done to consumers by the companies he “decided to dig up some dirt” on.

Unlike the “tipster (send in your tips here)” (“tipster (send in your tips here)” meaning the information came in anonymously), we have nothing to hide, We have no fear of any complaints by our customers and are not, and never have been, under investigation by any State or Federal agency.

We participate actively in discussions on GetOutOfDebt.org relating to debt settlement companies who have made a living out of lying & deceiving consumers to simply line their pockets.

Recently there have been very vocal opponents on the blog of our model, one which complies with Federal law and one which has collected fees AT settlement long before the federal mandate. Mostly, they appear to come from disgruntled, former operators of debt settlement companies, charging all their fees before service- companies designed to separate already broke consumers from more of their money!

I offer this background information on our company:

  • Employees: 5
  • Clients: Less Than 500
  • Incorporated: 2007
  • Fee: 30% of savings AT settlement (Prior to new FTC rule we had charged 25% of client’s savings AT settlement
  • Salespeople: 0
  • Customer Service: 3
  • Negotiator: 1
  • Affiliates: 0
  • Contracts: May be viewed on or website
  • Success Rate: May be viewed on our website

For anyone that understands what debt settlement was previous to the new Federal Rule regarding fees AT settlement ONLY, it should be clear that Active Debt Solutions is NOT one of the thousands of boiler room operations that forced the new law upon the industry. We were, moreover, the model for the new Law.

99% of the companies in debt settlement before the law changed on October 27, 2010 collected 15-25% OF THE CLIENT’S DEBT AMOUNT AS THEIR FEE BEFORE PROVIDING ANY SERVICE! Their fees were collected over 12-18 months, during which time their “clients” had saved nothing to settle any accounts, but had instead ONLY paid the settlement company’s fees.

Between 70% and 90% of those fees were paid to sales company as a commission. That begs the question of how the settlement companies could have serviced their clients after giving away so much of the fee just to sales commissions- The answer is simple; They did not service them. The only customer service these clients typically received was enough to keep them paying their fees and then they were usually abandoned if serviced beyond that point, at all.

The success rate (according to The FTC) for that model of doing business was less than 10%. The performance based model’s success rate is generally better than 75%.

Nearly one year ago, since the appearance of the proposed Schumer-McCaskill Bill, we decided to cease sales operations. We cut our small sales staff and since have focused entirely on servicing our current clients. Since then, we have looked at other opportunities, including all state and federal laws to reopen our sales division.

We have many letters from some of the states we have approached during the last year to better understand what is required for us to continue to operate in their states. Interestingly, nearly all of them told us that theirs is not to interpret their own laws, but rather to enforce them.

They suggest we hire a private attorney to interpret their laws and their state requirements. Enclosed are a sample of replies to us from state’s Attorney Generals regarding what is required to operate in their states. Perhaps the “tipster (send in your tips here)” knows more than the state’s AG’s, but the AG’s generally had no opinion. – Source

In open discussions with many states we were told that unless a client is harmed or complains that we are violating state laws that there is no basis for enforcing any laws.

The “tipster (send in your tips here)” I am certain will not believe this, but our clients have no reason to complain. We simply don’t lie to them; We don’t collect fees without any service; We focus on customer service; And we actually have to EARN our money in order to receive it. I go back again to the “tipster (send in your tips here)”. Why would he spend so much effort gathering “dirt” on companies who are openly doing the right thing? I assume it is because their own complaint-ridden, multi-million dollar operation was deemed obsolete recently by the new consumer friendly laws.

The “tipster (send in your tips here)” specifically points to Active Debt Solutions as not having a Florida Telemarketer’s Sales License AND as charging more than the allowable fee in the State of Florida. My simple reply to that is that we have NO Florida clients, so we cannot be charging more than the allowable fee. Secondly, we do not “telemarket” so we are not required to have a license.

Perhaps the “tipster (send in your tips here)” can also help us with the following:

  • What states require a license of our debt settlement company?
  • Who interpreted the state laws for him to decide which ones they are?
  • Which of our clients has filed a complaint against us? What was the nature of the complaint? How was the client harmed?
  • What laws has Active Debt violated? How? Who’s opinion is it that we violated any law?
  • If it is the “tipster (send in your tips here)’s” opinion, who is he?
  • What credentials does he have to interpret state law?

Lastly, I would ask, since Active Debt is hiding nothing and since the “tipster (send in your tips here)” has no evidence that we are violating any law or have any AG or client complaints, what is it we do that the “tipster (send in your tips here)” is not in favor of? How have we offended him? What, if anything should we be doing differently? And finally, why the ax to grind?

When we decide to begin marketing our services again, we will hire an attorney to interpret state laws in the states that we wish to provide services, follow the attorney’s guidance and do whatever is necessary to continue to help disadvantaged consumers with their debt problems.

Tell the “tipster (send in your tips here)” we are sorry the federal government stepped in and forced you to shut down your operation, but we take no responsibility for that. Until then, we will continue to provide exceptional service, with honesty, transparency and integrity.

Sean Ryan
Active Debt Solutions, Inc

Pictures of Active Debt Solutions Offices


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.

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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.

12 Comments

  • Angelo, can you point to the section on your site that outlines the states that you are able to provide services in? I cannot find this…

    So, for your CCCS programs that you refer clients into, are you referring those clients to Debt Free America? Or is it through Care One? Are the CCC programs the same as Debt Management Programs? If not, then how are they different?

  • We are able to provide services in the states listed on our website. What you are missing is that Debt Settlement is not the only choice we offer. We are able to offer CCC programs, Debt Management Programs, Bankruptcy referral as well as consolidation loans to consumers in those states. Would you be so kind as to provide your company website address ? I’d love to see the details of your program and the terms and conditions posted on your website.

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