In this post I’m not going to label the parties involved. Frankly, it’s potentially too explosive and it’s more important to get the information out rather than identify the companies.
I get lots of tips and many of those tipster (send in your tips here)s are inside companies and they feel compiled to speak out to help protect consumers from what they see as bad things happening.
What you are about to read is the feedback and advice from one such management person inside an advanced fee attorney model debt settlement firm that has been exempting itself from the FTC Telemarketing Sales Rules against advanced fees because they are a law firm.
The setup of this firm is similar to others that exist. In this case the firm does not actually process the accounts and instead hands the work off to a service provider which they claim to supervise.
Those in the debt settlement world are very familiar with the setup I’m describing.
Debt Settlement Insider Speaks Out
I’m very appreciative of this insider for speaking out about the practices in place and the realities of life inside the advanced fee debt settlement operation these days.
I you would like to speak up anonymously, please feel free to contact me here.
- Do the attorneys at the firm advertised actually settle the debt?
“The attorneys do not settle the debt ever, [x] has staff in their office that do that. The supervision from lawyers is a joke. They dont supervise anything other than having to get the marketing approved that you will be utilizing. The lawyers that [x] signs up most have no idea about how the program works, etc. They started giving out a DVD and front end companies emplore reps to give out their number if the client has any questions in fear the [x] lawyer will botch it up. All the attorney really does is go over the income and expense and make sure its accurate based on asking the client if it is and that the DSC filled out info for car, mortgage etc.
The problem is that clients think an attorney is representing them and will be doing the work, that is just not true. They now say the are represented if they get sued. That is what part of the retainer fee is, and reps say the lawyer will even go to court with you. I dont know of any case yet where that has happened.”
- How is the service sold to the consumer?
“The entire sales presentation is done by the rep over the phone. The lawyer does not do that.”
- What kind of program are consumers sold?
“The clients are put into a low settlement savings plan and the typical settlement percentage is much higher. So that means client stays in longer. Most reps don’t disclose that of course. Many sales reps lied selling the program, they still do. The sales reps that lied I only heard of 1 that ever got let go.”
- What can you share about the effectiveness of the back office process?
“The settlement process is a joke in most aspects. The software system used is not that good so many times clients have plenty of funds to settle or work on one but the creditor is not flagged. Its not until the client calls complaining that it would get escalated and then called. They talk about wanting to settle the clients account, but on more than one occasion [x] mentioned its more cost effective if clients cancel around the two year mark. That way dont have to service them and the fees are collected.”
- What is the success rate of the program?
“Most clients do not complete the program if over 20 percent did I would be shocked.
At then end of the day the service is terrible, most clients dont complete the program and they are in worse shape.
Most clients just pay fees. They don’t save crap until like a year out, by then creditor has gotten to them, or they are sued, etc and they freak out.”
- Do you get a kickback from the escrow company the client funds are placed with?
“We absolutely do. This was an issue when a client questioned the [x] doc says the fee is 9.95 but on the schedule of payments was 12.95. If anyone traces it, I guarantee it will be there.”
- What about client data security?
“They don’t even keep their server rooms locked which is a MAJOR violation. Anyone can go in there and take data of clients, social, credit card numbers etc.”
- What is happening these days with all the suits against advanced fee debt settlement companies?
“[x] has contacted the marketing companies that are sending us clients to now help pay for lawsuits agains the law firm. One DSC told me [x] would just remove the money from the escrow account if they did not pay which technically is illegal. [x] is not supposed to have access to that money OR influence the owners on what to do which [x] does both of.”
- So the customer service representatives are the ones really do the work. What’s the experience level with them?
“Most customer service reps are kids, probably mid-20s max . They are clueless about debt and finances. and yet are on the phones with these clients. I know a lot of them, most people that work there hate the culture and environment of the company.”
It certainly seems like time is ticking down for the boiler room mass market advanced fee attorney model debt settlement firms. More and more information is being made public that raises concerns and issues.
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