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Prestige Financial Solutions Declares the Debt Settlement Industry is Dead

An interesting press release out today from Prestige Financial Solutions declares the debt settlement industry to be dead. Prestige Financial Solutions is a debt settlement company. – Source

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The Press Release

The Debt Settlement Industry Is Dead!

TASC (The Association of Settlement Companies) has seen over a 60% reduction in its membership of debt settlement companies since the beginning of 2010!

DENVER, April 7, 2011 /PRNewswire/ — As our economy struggles to recover, the same is happening for the average consumer. Americans have been falling deeper into debt using credit cards just to pay for basic living expenses. The credit card debt relief alternative known as debt settlement, as an industry is all but dead; leaving millions of people destined to bankruptcy.

At the start of 2010 there were over 200 debt settlement companies as members of TASC offering debt settlement services. According to the TASC website in 2011 their members have dropped to less than 60, close to a 70% drop in membership. [Actually as of today it is 45.]

Why? In October 2010 the FTC (Federal Trade Commission) enacted rule changes for the debt settlement industry. The major change is the way in which debt settlement companies can collect fees. No longer can a debt settlement company charge fees in advance prior to settling their client’s debt. This has severely affected the cash flow of these companies; thus starting the implosion of the debt settlement industry.

Prior to 2010 the FTC received numerous complaints about the debt settlement industry, and after years of investigation determined that changes needed to be made to protect consumers from losing their money. The vast majority of these companies were charging fees in advance of settling their clients’ accounts; however, they were not delivering the services promised!

See also  Prestige Financial Solutions Can No Longer Service Clients. Terminates Agreements.

Companies that are going to survive these changes by the FTC will have to adhere to their rules of not charging advance fees, while still providing the level of service expected by the American public.

Prestige Financial Solutions the country’s leading provider of Pay As You Settle debt settlement services, foresaw these changes well in advance of the October 2010 rule changes. For over a year before these rulings were made PFS was successfully running the Pay As You Settle model.

Since the beginning of the implosion of the debt settlement industry Prestige Financial Solutions has not only survived but is growing. Eric Thompson, founder of PAYS has said, “I have found consumers very receptive of still having an alternative to bankruptcy without risking any money before a settlement has been reached. This is the way of the future for the debt settlement industry!”

SOURCE Prestige Financial Solutions

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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.

20 Comments

  • Thanks. That broad of a definition makes more sense.

    I personally think the number is high unless it includes lead gen too.

    I personally do not think there have ever been more than a few hundred companies operating at any given time that provide the actual direct to consumer service of settling debts.

  • I appoligize, I should have clarified that when I made the statement. Bout a year ago, the company I work for brought in an Atty that worked for the FTC that deals with debt sttlement agencies. I dont recall her name offf the top of my head. The 5k number is front end seller, affiliates, back end negotiators, and full sevice shops. The current number of 550 is an best guess right now. The company I work for is currently trying to see who is really left in the industry.

  • Khaleal,

    How did you come up with the 5000 count from a year ago? What is used to define a DSA to include it in the count?

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