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!
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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