In a previous article published on the GOOD site, I asked the question: Is the debt relief delivery system broken? The article outlined the statistical failings of different options consumers seek in order to get relief from debt they can no longer afford. I also identified several reasons for the shortcomings and encouraged industry participants to share ideas for how to overcome them. The feedback and suggestions from readers in the comments were helpful. They boiled down to:
That last item inspired a standalone article about compensation.
All of the feedback and suggestions are good. Some companies already do well in these suggested areas, but may find it necessary to improve sales and screening, or will work to improve cooperation, or seek out and establish solid relationships with industry partners.
What follows are some of my ideas:
General practice attorneys, and most especially attorneys practicing consumer law (bankruptcy, consumer protection), should look to serve their local markets in settling debts. Virtually all professional industries have been impacted by the downturn in the economy, including the legal profession. Debt settlement is not a difficult service to introduce into a law practice.
Nonprofit credit counselors should be offering debt settlement education AND direct debt settlement services. Adding the debt settlement tool and offering the education and support to consumers who cannot qualify for a proposal to be submitted to creditors for a DMP would replace fair share and grant revenue. I am not speculating on this fact. I have the data that proves it.
Debt settlement service providers working with business models of the past have closed and will continue to die off. Those willing to embrace changes to how they operate and willing to reduce their fees will be better positioned to survive and compete with CCA’s and attorneys entering the space.
A better and less expensive technology can be introduced that allows settlements to be accomplished with issuers, assignees and purchasers that will enhance efficiencies, lower costs for all (most especially consumers), and allow for auditing, tracking and monitoring.
Consumers need to become more aware and better informed. Learning the details of legitimate debt intervention services as applied to their own unique set of circumstances and goals is the number one way to increase success rates and reduce the amount of time and resources that get wasted each year throughout the debt relief industry. More companies can/should/will embrace a consumer-centric educational focus that provides people the tools they need. This will create an environment where consumers become less reliant on direct services; are encouraged to have a more active and responsible role in their own debt relief decisions; participate in their own positive results; and apply financial fitness tools moving forward in their life when no longer overburdened by unmanageable debt.
Last year I committed to a project that embraces much of what is outlined above. The idea was to open up settlement to the nonprofit space while meeting the educational mandate of their tax status and to provide them with an additional tool to assist consumers. I have done that. The system is plug and play. Any CCA who would like to learn more is welcome to contact me at 208-265-8884. The opportunity for you to serve 2 or more times the people you currently are able to should provide great opportunity whether you are a small regional or national organization.
What was originally designed for implementation by nonprofit DMP providers will also be available to for profit debt relief companies as well as anyone who is interested in being of maximum benefit to consumers struggling with debt. I welcome all inquiries regardless of tax status.
This project embraces many attributes from my company’s business model for assisting consumers since 2006. Shortly, CRN will be making changes that incorporate much of the project design – more on that next week.