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Home > Debt Relief Industry > Business Models > Debt Eye Tries to be The Automated Debt Relief Solution for All. Swing and a Miss.

Debt Eye Tries to be The Automated Debt Relief Solution for All. Swing and a Miss.

When I heard about Debt Eye I perked up. Was this finally going to be the first debt relief company to provide a low cost solutions for people to create their own debt management plan and offer other solutions to get out of debt?

If so, this could be a total game changer and would put a lot of debt relief companies out of business.

TechCrunch is reporting this Y Combinator funded startup is setting out to make that industry largely irrelevant.

But TechCrunch found one of the problem areas with the current Debt Eye approach.

Of course, Debteye can’t exactly renegotiate your debt through a bank’s API. Instead, it helps you fill out pre-generated forms(it’ll also fax them to the bank if you’d like). And it will give you a script to read from when you’re talking to a banker.

This part made me skeptical (wouldn’t a professional debt consultant be better at negotiating good terms than your average layman?). But Sun says that large banks have actually established a set of terms that dictate what they’ll offer to customers (in other words, he says there isn’t much room for consultants to negotiate), which is why their standardized script should work.

Debteye is currently free, and will eventually charge a monthly fee for its service. – Source

TechCrunch reports the three co-founders are all certified credit counselors. IAPDA certified?

The one and only founder identified in the TechCrunch piece is John Sun.

I could not help but notice that there are two domains that link to the same site.

Registered to:
Debteye Inc
700 N Green
Chicago, IL 60642

Only one little problem here, a search of Illinois corporate records could not locate any corporation or LLC registered to do business in Illinois as Debteye, Inc. or Debt Eye, Inc. Oops!

Registered to:
John Sun
[Redacted] Northbrook, Illinois 60062

It was the that caught my eye. used to go to Fortis Debt Solutions.

How Debt Eye Says It Works

Debt Eye claims to allow users to login and give up some personal data they will then use to scrap financial records using Yodlee, like Mint does.

After they pull in your personal information they claim to then be able to develop a plan on how to get you out of debt faster. What’s missing so far in their approach is that rather than have an automated solution that allows you to electronically submit a debt management plan to your creditors to lower interest rates, they hand you a script.

Of course, Debteye can’t exactly renegotiate your debt through a bank’s API. Instead, it helps you fill out pre-generated forms(it’ll also fax them to the bank if you’d like). And it will give you a script to read from when you’re talking to a banker.

Apparently they’ve read this site and copied the format I use to answer reader questions in their blog section. I suppose they spotted some value in what I do here and decided to use it for their own site.

But for me here is where it ran off the rails.

You see on their learn more page they tossed up some of the same old verbiage that has been so wrong in the debt relief industry for a while now.

The say bankruptcy is often a last resort for consumers. That’s just flat out not true. And they use scare language that bankruptcy will have a long-lasting impact on the credit score for 7-10 years. Also not true.

On an additional page they even use the same old line “Bankruptcy laws have changed since 2005, and it’s more difficult for people to qualify for bankruptcy.” That’s just not a true statement. You would expect people claiming to be debt experts to have a better grasp on this subject. My confidence is beginning to waiver a bit.

Then they say, “Chapter 7 Bankruptcy: This is perhaps the most common type of bankruptcy that consumers file when trying to eliminate their credit card debt.” As debt experts shouldn’t they know that Chapter 7 bankruptcy accounts for more than 70% of all fillings.

And then there is this statement about debt settlement that makes these guys sound like old debt settlement sales people. The percentage of saving statement appears to clearly be unsupported for such a new company and is probably a violation of the FTC TSR.

Then they gloss over the risk of being sued and the 7 year impact on your credit. Not to mention the same old rephrased TASC line that debt settlement is an aggressive approach to pay your creditors

I’ll have to give these “experts” a total miss on credit counseling. It’s not ideal for people still current on their bills, it’s ideal for people that can easy afford their current monthly minimum payment. If you are behind and can afford the minimum payment before you got hit with late fees, it’s perfect for you as well. I’m wavering more.

But there’s even more stuff to correct. I’m not going to do all the work for them though.

Debt Eye is Worth Watching

Debt Eye is one of the people that are taking a swing at the next phase of modern debt relief, the automated debt relief plan that’s hooked in with creditor APIs and cuts out the manual labor. Those solutions are coming. I should know, I’ve talked to several providers already, that are working on it.

But as far as Debt Eye goes, my bet, based on what I’ve seen so far is these are not the guys that are going to hit this approach out of the park. I mean really, not even showing up as an LLC in their own state?

Maybe with some more time and lessons learned as they grow they can overcome what appears to be a bunch of rookie mistakes. After all, don’t we all learn better from our mistakes?

Keep trying guys. I’m rooting for you.


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About Steve Rhode

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.

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