Leaked Document Says DebtConnect Online Part of Settlement Process for Persels & Associates

A tipster (send in your tips here) sent me a document from inside Persels & Associates that lays out current client debt settlement success rates. The percentage of settlements is interesting but what really caught my eye was the statement that after implementing the DebtConnect Online solution that it was easier to secure some better settlement offers for clients.

DebtConnect is an online portal where creditors are able to log-in and accept pre-negotiated settlement offers. This process significantly speeds up the settlement process and all online activity through DebtConnect is recorded and noted in the client’s file.

On the surface it appears the DirectConnect Online system, that I’m not familiar with, may have an edge over other similar systems that attempt to achieve the same sort of outcome but charge the creditor up to 8% as a transaction fee. I can see no statement by Persels & Associates in the leaked document, that this is the case.

While the leaked document is not a statement about all clients enrolled and only addresses settlements actually received by Persels & Associates in August, it is a representation of the actual settlement clients received. This is not to be confused with statements made to consumers in an inducement for them to purchase settlement services. In those statements and figures quoted the FTC has extensive guidance on what must be included to give consumer full information. In that case, the overall performance figures would need to include accounts not yet settled or dropped.

In this case the leaked Persels & Associates document is not a sales document so the figures need to be read in that context.

The document says:

“Our Creditor Negotiators had a great month during August, settling 7,642 creditor accounts for our clients. Their success is due in part to our expanding relationships with original creditors, debt buyers, and collection attorneys. Each month our negotiators formally exchange settlement data with over 30 of the largest firms looking for the best deals through our Data Exchange process.”

See also  I Was With CareOne and The Persels and Associates But Now I Have a Judgment. - Jeff

That’s huge, “settling 7,642 creditor accounts” in one month.

And apparently the settlement percentages in August must be somewhat within expectations since the document says, “In determining which settlements to pursue, we only consider deals that are in the best interest of our clients. We use our historical settlement intelligence to determine if and when we should settle an account with a particular creditor. Our settlement rates clearly display the success of this approach.”

Here is the information Persels & Associates probably did not want to leak out, besides the rest of the document as well.

Below are some of our top activations from August. Most of these settlements are NOT with the original creditor (except BOA where we reach favorable settlements through Data Exchange). Often the very best deals are reached with a collection agency and it is important that a client understand that original creditors and collection firms can and will be very aggressive in their collection activities. They will often say or do anything to secure a payment. Clearly, they are not looking out for our client’s best interests. That is why your assurances and reinforcement of how the process works during your initial consultation is so vital. Settlement can be a scary process and that is why they hired a law firm to help. – Source

The information in the document shows the accretion, or balance creep, that typically occurs with accounts between enrollment and settlement when settlements are not able to be achieved straightaway, probably due to the need to accumulate money for settlement. Looking at a sample of the creditors included it looks like the balances crept up at the following rates:

  • Midland Credit Management – 12%
  • Zwicker & Associates – 8.5%
  • Frederick Hanna & Associates – 9.1%
  • Brachfeld & Associates – 21.6%
  • Bank of America – 5.2%

I’d love to hear from another settlement company that is willing to compare their settlement percentages in August on the record. Let’s compare apples to apples. I’m interested to see what similar results are from other settlement groups.


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24 thoughts on “Leaked Document Says DebtConnect Online Part of Settlement Process for Persels & Associates”

  1. Before I begin with my “official” comment I’ll disclose that I have been enrolled in CareOne’s Debt Management Program for almost 28 months.  I will also mention that I am an independent freelance writer for them blogging about my family’s day to day experiences as we fight to eliminate our credit card through that program.

    I am not am employee of Care One, nor is any comment that I make to be interpreted as being a response to this article by Care One in any way shape or form.

    I’m not going to add to the conversation going on in the comments section with regard to the legitimacy or need for Debt Settlement Programs in general.  My comment is directed more at the content of the article.

    Please correct me if I’m wrong, but my interpretation of the article is basically  that the document obtained essentially says this:

    While Persels & Associates continues to attempt to build relationships with original creditors, debt buying agencies, and collection attorneys, the highest success rate in securing a settlement is after the original creditor has basically given up on the debt – ie sold it to someone else.

    So, my logic goes like this:  When it is the original creditor trying to collect the debt, they are trying to get full payment from the debtor.  Thus, securing a settlement from the original creditor is going to be difficult.

    Once the original creditor gives up, and “sells” the debt to someone else, they most likely sell it for less than the full amount.  Once a third party owns the debt, they’ve got less invested in it.  let’s say they buy it for 50% of face value (I have no idea what a real percentage would be, so I’m just using a number).  Now, the third party tries to get money from the debtor.  They don’t have to get full face value to make a profit, so they are more likely to accept a settlement.

    So, my question is, given the above logic, does the document really say anything surprising or shocking?  I really didn’t think so – it basically just reinforced how I thought debt settlement would work.

    • Ugh I hope the upper echelons at CareOne don’t read this, you might find yourself out of work.  Then the question of how a freelance writer for someone is not their employee will only be an academic one.

      I fully agree that your interpretation of the document is correct.  Debt settlement victims of CareOne have to “sweat out” the collection activities of over 75 percent of creditors by number of accounts, for about six months.

      • Errick – is that like DMP-ers that have to sweat out 4 to 5 years of payments when they may have been able to discharge their debts and gotten on with their lives in a chapter 7 in a matter of mere months, but the nonprofit DMP-ers who are supposedly watching out for consumers don’t tell them to contact a local attorney to look into it?
        Sorta makes all those people who were not properly informed about their options in BK by the DMP-ers victims too.

        “Now get in the pit and try to love someone”

      • Errick, as a freelance writer I’m an independent contractor. Independent contractors are not employees – I’m sure you already understand the difference between the two. 

        I stated my association with CareOne simply because if someone would happen to go poke at my twitter profile, my personal website, or my blogging history it would be pretty darn obvious that there is an association, and I wanted to ensure I was being upfront with exactly what it is, and what it is not.

        I wanted to make sure that readers understand that my comment is just that – My personal comment. I don’t believe I said anything out of line or inflammatory.  I did not state anything other than my own personal opinion of how I perceive settlement services to work based upon my interpretation of information I’ve read on various websites, including this one.

        Anyone engaging in settlement services with their eyes anything but wide
        open as to what they’re getting into may indeed find themselves in a
        situation they did not expect.  Again, I am not arguing the point of the
        necessity or legitimacy of settlement services, just the content of “leaked” document.

        And again, I don’t see anything in it that is earth shattering.  It seems more along the lines of saying “You’ll get a better tan on a sunny day than a cloudy day.”

        • I think the problem is, in Washington State the suit is about whether CareOne has structured debt settlement intentionally to fail.  And if the plaintiffs show that they are not settling debts with anyone they take fair share payments from, well that would look really bad.  And telling people they have to “hold strong” which infers they intend to help when they really do not, and its easy to prove they do not because they are taking fair share, that also looks really bad.

      • LMFAO !!  You just did it again Errick.  When I offer you the opportunity to prove your point by contacting my graduated clients you tell me to post success rates.  My guess is you will question the truthfulness of the data so I genuinely want you to call my graduated clients yourself and speak with them about their experience. 

        I am willing, ready and looking forward to helping you see proof of real life success stories. Here’s your chance to prove me and the entire DS industry wrong so Im not sure at this point why you would turn down this offer.

        • That’s simply not true. I just said there is no reason we can’t have this discussion in public.  You are actually proving my point.

          • You talk in circles more than my 13 year old. How exactly are we supposed to have this discussion when you are not willing to take me up on my offer to contact my graduated clients to hear for yourself their experience?  

            In the past you have dismissed most client testimonials as “internally generated” and I’ve also seen you try to discredit several reputable DS companies who have attempted to have this discussion with you.  So, without hearing directly from consumers it seems impossible to have an open discussion with you.  One can only conclude that you are not even open to the possibility that settlement has worked for many consumers.  

            Tell you what ….I will ask Steve to contact them and write up an article.  My guess is that even with the data/testimonials you will somehow find a way to change the subject or try to discredit the article but I’m willing to bet that you would not admit you are wrong (my ex wife has the same problem) ….I’ll do it anyway though because proving you wrong will give me some satisfaction.

  2. Darn, sorry.  Anyway, it would have shown that CareOne negotiators don’t have a meaningful relationship with 14 out of 15 top issuers of credit cards.  You have to be charged off before you can get any real assistance, unless you are one of the 16 percent who have a BOA-issued card.  Do you think people who sign up are told this?  I doubt it.

    • Errick – I don’t think you understand settlement the way you think you do. Either that or your love affair with CareOne clouds your deductive ability.

      • Maybe so, but I can add and multiply. 48 plus 40 percent of 52 is 68.8. That’s what the average settlement costs the client, 68.8 cents for every dollar of debt.  But the average victim is not paying that nearly that much.  Almost all of them pay 55-65 cents on the dollar, over 60 months, which is too long to begin with.  They are never going to get to the finish line, intentionally, because they are scam victims.

        And what will they have left, after thay have been ground to a pulp by simple math? Chase, Discover, Amex.  Half of all credit card debt that CareOne doesn’t even try to deal with, because of the inherent conflict of interest.  And it doesn’t really matter whether they do or not, because they don’t actually intend to get people out of debt anyway.  What am I failing to understand?

        In fairness, I think all debt settlement providers are doing pretty much the same thing.  But I know that CareOne debt settlement is a scam.  And you can take that “to the bank.”

        • I was speaking to your 15 of 16 comment. You went back to your whole 55/65 stuff you have repeated on this site for some time. Your math attempts to apply a static result that does not exist with ANY service provider I am aware of. Too many variables.

          Errick, I am asking with the utmost sincerity; what do you suggest the over indebted who cannot keep up payments but who would like to avoid bankruptcy do?

          Please answer the 55/65 comment. I have read that answer already on other threads.

          What should consumers do given the question above?

          • I would really love to answer that question for you because I think I have a great answer, but if I start trying to sell ___ on here, I’ll get banned.  But first, your question makes an assumption, that there must be a product between debt management and bankruptcy.  I don’t see why that must be, unless you like carving out and preying on a vulnerable, unsophisticated, and uninformed market.

            I believe that with a few rare exceptions, people should be counseled to bring their income and expenses in line with a debt management plan, and only after they have tried EVERYTHING and failed, then be persuaded to file bankruptcy.  Debt settlement is all of the bad things about bankruptcy protection without any of the benefit.

          • Thanks for using the word love in your reply. It means a lot
            to me, even this far out of season. Allow me to return the favor. The following
            is submitted with love.

            Errick, my assumption is that you work in credit counseling at an executive
            level. Unless you reply that you are an attorney practicing debt collection or
            bankruptcy, it would be hard to shake me off of this.

            You have posted continuously on Care One threads on this site and rail against
            debt settlement. You never mention that CareOne also provides debt management
            plan services. Why is that?

            CareOne offers DMP’s as a for profit company. One of the few who do. They do
            not accept fair share or grant contributions from creditors to my knowledge,
            unlike the non profit DMP providers who, for the most part, are beholden to
            creditors and their whimsies because without the revenue from creditors they
            would fail as going concerns. Why is it that CareOne can do what non profits can’t?
            Are they more efficient than non profits? Probably, but let’s be real here. It
            costs less than 10 bucks a month to service a DMP client. For some I bet the
            costs are less than that. If the average monthly fee is $30 that’s at least a
            200% return! With that kind of margin, why do non profits even need fair share
            or grant money from creditors? What well run company cannot do well with a 200%
            monthly operations budget?

            I did not account for marketing. To do so would be to admit that nonprofit DMP
            providers have to market. All the stuff I see presents nonprofits as some
            benign help the community -help the people – type of set up. They are not. They
            are companies just like any other. They just don’t pay tax and have to comply
            with certain things as a result. They are to provide education. Big whoop!
            There are many free sites with constantly updated money, budgeting and finance
            education and advice that blow doors on the education offered by most non
            profits. That being the case, non profits appear to not have to pay tax for
            next to no good reason. If free sites can provide the same and better education
            to consumers at no cost and pay tax on whatever revenue they generate, why cut
            the nonprofits a tax break? Because they do the educating live in office or in
            the local community, in schools and such? Maybe, but how many of the non
            profits do that really? Could nonprofits who do not engage in DMP services do
            the same and non profits DMP-ers pay tax? Yes indeed. Would creditors cut fair
            share and grants even more because the “donations” would no longer be
            a tax write off for them? You betcha! Nonprofits may take exception to my
            stating this so simply, but it’s just not complicated.

            So, non profits market. Is that why they need grant and fair share money? The
            marketing and acquisition costs? Probably partly. I think its more a fact of
            customer attrition though. What is the success rate of a DMP client? How many
            people drop from a DMP in 3 to 12 months. Determining that number is important
            for the American public to know. If the attrition is high, it means non profits
            enroll people who should have been referred straight to bankruptcy. That’s the
            only next step according to your answer. Why take on people who cannot finish?
            For revenue and to serve the nonprofits true master, the banks. If nonprofit
            DMP providers truly serve the consumer, and given your position that its either
            DMP or BK than the only people who should ever be referred to nonprofit DMP
            providers would be because of the BAPCPA. Following your logic it’s just that
            plain and simple.

            People should TRY EVERYTHING and when failed then to bankruptcy
            is what you said above. Why Errick? Because its the moral thing to do? Because
            it generates revenue for non profits? Because it serves banks? Your logic makes
            DMP’s irrelevant. Large creditors make DMP’s irrelevant. They offer direct to
            consumer plans that cut nonprofits out of the picture. Small creditors without
            the infrastructure for collection are the only ones that should be working with
            nonprofit DMP services.

            So, what’s your opinion on CareOne’s DMP service they offer while not accepting
            funds from creditors? Any feedback? I know mine. Its Kudos to CareOne for being
            positioned to represent consumers more than banks.

            I guess there are some states that require a nonprofit deliver a debt
            management plan. So non profits should only exist to serve those states. I
            think those laws should be changed to allow for profit companies who can do it better
            and for less cost than the non profits and who pay tax to the treasury that
            supports this country in its current troubled economy. Why the hell should
            nonprofit DMP-ers be getting the tax break on DMP revenue when there is not
            enough in the coffers to prevent severe poverty in this nation?

            In fact, maybe nonprofit DMP-ers are a drain on our nation’s
            economy. They enroll people who can qualify for discharge in BK who would then
            return to responsible spending in months as opposed to 4 and 5 years. Looked at
            in this light, nonprofits really should only exist as relates to the BAPCPA
            requirements. By the way, the BAPCPA was bought and paid for by banks, but you
            know that already I am sure. True consumer advocated fought BAPCPA tooth and
            nail. Nonprofits were mum. That’s because they do not represent consumers as
            much as they represent banks.

            Given the financial straits people are in, they should
            absolutely speak with a bankruptcy attorney before ever speaking with a
            nonprofit DMP company and only take the referral of the BK attorney as part of
            the prequalification for discharge. Period. Period. Period.

            You said above: “I would really love to answer that question
            for you because I think I have a great answer, but if I start trying to sell
            ___ on here, I’ll get banned.  But first, your question makes an
            assumption, that there must be a product between debt management and
            bankruptcy.  I don’t see why that must be, unless you like
            carving out and preying on a vulnerable, unsophisticated, and
            uninformed market.”

            Your comment insults so many people I do not even know where
            to begin. In my opinion the only person who makes a statement like that is one
            who is aloof, smug, close minded and holier than thou. You insulted millions of
            consumers. You insulted very intelligent people serving in a regulatory
            environment at the state and federal level (FTC commissioners and staff
            attorneys, AG’s and assistant AG’s etc.) who have worked very hard over the years
            to establish regulation of the “in-between” solutions. The fact that in-between
            is heavily regulated is because it absolutely does serve a purpose. Judges,
            attorneys, and so many more…. You insulted them because you accused them of “preying
            on a vulnerable, unsophisticated, and uninformed”… people.

            The arrogance you must possess…. You essentially are better
            than all of us, aren’t you?

            You say try EVERYTHING in your comment, but you don’t mean

            Hey, I have another question for you Errick – You favor DMP’s
            and I assume you work in the nonprofit sector at a high and well informed
            level. How consumer focused are the DMP-ers when 2 years ago one of the largest
            credit card issuers and another one in the top 12 were offering account holders
            to settle their accounts at 15% of the balance pre charge off? Were the DMP-ers
            “educating” consumers about that? Bet not. For me, that would mean they are not
            interested in helping consumers, just themselves and the banks they serve.
            Banks that, need I remind you, have and will continue to pay out BILLIONS of
            dollars for their wrong doing. That’s what you support Errick – A system that
            brought this nation to its worst economic condition since the great depression.

            Sorry there hon, but given what I state above it may indeed
            be you who are “preying on a vulnerable, unsophisticated, and uninformed

            “Now get in the pit and try to love someone.”


          • My that is a lot of words, I didn’t even finish reading it.  To me it’s very simple.  My statements explain why nobody can find anybody who has ever completed a successful debt settlement plan.  Your statements do not.  If you were close to right, there would be tens of thousands of happy families out there, at least a hundred of of which would have shared their happy testimonials on this site.  How many have done so?  Zero.

          • I am not sure if this is going to post above or below our exchange sweetie, so I will copy:
            Errick – “My that is a lot of words, I didn’t even finish reading it.  To me it’s
            very simple.  My statements explain why nobody can find anybody who has
            ever completed a successful debt settlement plan.  Your statements do
            not.  If you were close to right, there would be tens of thousands of
            happy families out there, at least a hundred of of which would have
            shared their happy testimonials on this site.  How many have done so? 
            Your statements do not explain anything about people who do or do not complete settlement plans and I was not speaking to you regarding debt settlement plans, happy customers or testimonials at all. I was speaking directly about debt management plans and nonprofit credit counseling.
            I am surprised that you have chosen to ignore my comments on DMP-ers.
            I hope that tail between your legs does not get too uncomfortable.


            “Now get in the pit and try to love someone”

          • Cupid, great post.  Once again Errick talks shit then changes the subject to avoid deeper discussion.  His comments continue to show his agenda (pro non profits/BK and anti settlement) and lack of knowledge/experience with debt relief options.  All you hear are rants of 55/65, settlement sucks and everyone should file BK….I think he has tourette’s.  
            Errick, I’ll make you a deal.  If I provide you with the names and numbers of a few clients that have completed my debt settlement program and they confirm that we were able to get them out of debt for about half of what they owed (fees included) will you publicly admit that you were wrong and admit that debt settlement works?  I just asked my staff to reach out to them for approval to be contacted, I’ll let you speak with them directly.  Fair enough?

          • I have never questioned the genuineness of a client testimonial on this site, I have always accepted them at face value.  Since you’re a student of my work you will know this. Also if you post a false one you could get into a lot of trouble, or else it would have been tried before.

            You do not need your clients’ permission to say that John and Jane got such and such, as long as it is not personally identifiable.  And why should I have all the fun?  Get your clients’ approval to send their contract, plan, and their settlement letters, names and numbers removed, to Steve, and he can post them for everyone to see.

          • Oh and why, if everything I say is so obviously silly, do you feel the need to cross post to every thread I have ever contributed to?

  3. Let’s see if this posts right, this is the latest data I could find for credit card market share by balance:

    RankIssuerOutstanding Balances (In Billions)Market ShareCumMarket Share1Chase$165.8719%19%2Bank of America$145.1016%35%3Citi$102.5412%47%4American
    Express$78.169%55%5Capital One$55.466%62%6Discover$48.906%68%7Wells Fargo$30.893%71%8HSBC$24.803%73%9US Bank$20.172%76%10USAA$12.961%77%11Barclays$10.671%78%12Target$7.781%79%13GE Money$7.171%80%14PNC Bank$5.081%81%15First National$4.320.5%81.5%TOTAL CREDIT
    CARD DEBT:$887.10(Source: Nilson Report, August 2009, Federal Reserve)

  4. I am sure the creditors/collection agencies are not going to be too happy seeing this information made public.  It is also interesting to still see creditors extending benefits to a credit counseling company(Care One) that is known to also be doing Debt Settlement.


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