With the recent announcement that Primerica representatives are going to start promoting debt relief services it’s just got to open a whole new can of “what not to do” and pour it on consumers.
Primercia representatives that sell investment and insurance have to take a whole series of exams to become licensed to sell those products. But what they don’t know is the liability for miss-selling debt settlement or debt management products can be ginormous. Well that is if you are concerned about legal action, fines, and penalties.
The Primerca sales force seems to be built on representatives that are engaged in other things but want to get:
- Freedom from a job
- Freedom from a boss
- Freedom to be in business for yourself
- Freedom to dream big – Source
Primerica offers the chance for you to start a business part-time, while maintaining the security of your full-time job.
Regardless of whether you love what you’re doing now, and simply need to earn additional income – or if you want launch an entire new career – Primerica offers you the flexibility to decide what’s best for you.
Would you like the potential to earn an extra $500 a month to pay off debt, start an education fund for your children, buy a new car, or take a nice vacation?
Primerica lets you start part-time to earn a second income, or transition to a new full-time career while you keep your current full-time job.
Primerica was built for people who want to make their dreams come true. – Source
The underlying question is if part-time sales reps are in the debt relief industry loop enough to know what to avoid doing and supervised sufficiently that they avoid making claims and recommendations that can land them in hot water.
Primerica has had some experience selling a product called DebtWatchers. They promote this product as a way to monitor your credit report and put together a plan to get out of debt. At least one site reports the service costs $14.95 per month (source) but it appears to be something people can get free with a combination of Credit Karma to monitor their credit report and score and ReadyForZero for a plan and help to get out of debt.
But maybe Primerica is embracing debt relief products more to help them recruit new sales representatives rather than sell more products or services? In a recent SEC filing Primerica does say:
Economic conditions, including unemployment levels and consumer confidence, influence investment and spending decisions by middle income consumers, who are generally our primary clients. These conditions and factors also impact prospective recruits’ perceptions of the business opportunity that becoming a Primerica sales representative offers, which can drive or dampen recruiting. Consumer spending and borrowing levels remain under pressure, as consumers take a more conservative financial posture including reevaluating their savings and debt management plans. – Source
Regardless the concern is that Primerica sales representatives are commission based. But we’ve seen how being paid for selling a product can skew those motivations in the debt relief world can easily lead sales representatives to say things and promote things that might just not be based on fact.
What Primerica Sales Representatives Need to Know
Let’s just hope that Primerica independent and part-time sales representatives have received a keen awareness of state regulations for selling debt relief, are skilled debt experts and hold a telemarketing license where appropriate and are intimately familiar with the Federal Trade Commission Telemarketing Sales Rules regarding debt relief services.
If not, here is a list of things Primerica representatives should avoid doing.
- Do not sell any debt relief services unless you have first verified the underlying debt relief service provider is licensed in the state the consumer lives in.
- Make sure no upfront fees are charged. That’s illegal. You can’t collect any fees from a customer before you have settled or otherwise resolved the consumer’s debts. If you renegotiate a customer’s debts one after the other, you can collect a fee for each debt you’ve renegotiated, but you can’t front-load payments.
- Make full disclosures to consumers based on substantiated data and performance. Be sure to full disclose:
- How much the service costs.
- How long it will take to get advertised results.
- How much money a customer must save before you’ll make settlement or repayment offers to creditors.
- The consequences of not making timely payments. Including credit report damage, lawsuits, and wage garnishments.
- Understand the basis for any claims made and disclose those to consumers so they understand if fees have been incorporated into savings claims.
- Make sure you include the impact of consumers that enrolled in the program but dropped out in determining success rates.
- Include all debts of the consumer and not just debts settled in performance calculations.
Primerica Representatives Need to Know About the Lawsuits
There have been a substantial amount of lawsuits against debt relief companies. I’ve covered a bunch of them here. You can distill those suits down to one primary factor, consumers were given unrealistic expectations about what the program would deliver and not made aware of the negative consequences. When these issues occur the sales representative can get dragged into the suit or at least named.
Consumers that are unhappy with their sales representative or the marketing they’ve received may submit a complaint, here. If you feel you’ve been duped and want to get a refund for debt relief services, then follow this guide.
Let’s just hope that because Primerica representatives may meet with consumers face-to-face they think that will shield them from liability or rules. The Telemarketing Sales Rule is not the only regulation out there that regulates the sale of debt relief services. Most states have rules as well.
For information on state rules and compliance information Primerica representatives should use the free compliance module of this site. Additionally, it would be a good idea to run prospective customers through the Get Out of Debt calculator to make sure they understand their options and alternatives so they don’t feel pushed into any one solution.
— Andre' (@indreyoutrust) June 9, 2012
The DEBT CRUSADE is on in Phoenix! Who ya gonna call? PRIMERICA!
— Rich Goldstein (@rlgsnsd) June 6, 2012
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