The Selling of Debt Settlement Services. It’s Easy to Sucker You In.

Did you know that for only $10,950 any person of unknown character and intent can launch a national advertising campaign and sell debt settlement services?

On my last tour of the country I was laying half awake in bed and on came this commercial that certainly appeared as if it was a news broadcast or message from the government. It all looked official but it was nothing more than a sales pitch for debt settlement services.

The audio below is not the best but it was the best I could get on short notice.

The commercial lead me to a company, JCRTV, that appeared to specialize in debt settlement marketing services. That could generate leads for seemingly anyone willing to pay for the debt settlement marketing package.

They promised:

  • Higher percentage of converted calls to Leads
  • Higher percentage of qualified callers
  • Lower cost per in bound unique lead
  • Instant inbound Activity for your sales staff
  • Trackable phone number provided & routed to your location
  • Inbound call analysis completed & e-mailed to you daily
  • Score calls and evaluate sales staff


This company is promising to air a professional produced debt settlement commercial to attract sales leads and consumers to be sold to for not much money up-front. If you watch the commercial one of the visual message is that you need to eliminate your debt through debt settlement so you can get access to platinum cards and credit again.

Here is the package that was for sale on the day I saw the debt settlement commercial.


As you can see the emphasis of this commercial and packaged news looking government appearing spot is to generate leads for a sales staff to close. There is no mention of the appropriateness of the debt settlement solution for viewers or callers and that screening will be left up to the sales staff fielding the calls.

See also  Leadango, Selling Debt Settlement and Loan Modification Leads

In fact, the site mentions that leads from the commercial that land in their call center will be handled to maximize revenue.

Work The Lead ensures that leads are captured and then routed in the most profitable direction for you. Source

And if someone or some company is paying $10,950 to air the commercial, how selective do you think they will be about the people that are calling in determining who is a good candidate for debt settlement services?

But this company selling the packaged commercial, which I felt was excruciatingly misleading as a news program with inserted commercials, also markets, guess what, loan modification commercials and leads, another industry with a current dubious record of misleading consumers.

jcrtv loan modification

So let there be no mistake that when you call some random commercial off a radio, print or television commercial, the emphasis is not on placing you in the most appropriate solution, but selling you a service and making money off of you. Don’t believe me, read what an industry insider had to say.

Debt Settlement is Even Sold by Multi-Level Marketing Programs

Here is a video that promotes the money that people will make by selling you debt settlement services. Go to 6:06 to see the advertised debt settlement commission structure for this program.

Now go to 2:00 in this video to see the money that is promoted that you could make by selling people into debt settlement.

So are these video all about the benefits of debt settlement or the money that can be made by selling people into debt settlement and credit restoration? It’s just about selling people services they may or may not need.

Hopefully I’ve been able to educate you that when you are reaching out for debt settlement services you are nothing more than a sale waiting to be closed. There is no emphasis made about if it is an appropriate solution for you. It is simply about ROI, closure rates, profit per deal. I’m afraid that people are generally sold using a lot of information that seems plausible and realistic, but it’s simply not.

See also  Have You Heard of the National Debt Crisis Center? - Eric


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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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14 thoughts on “The Selling of Debt Settlement Services. It’s Easy to Sucker You In.”

  1. Hey Steve,

    Thanks for sending me the link to this video. You are correct most of these companies are scams and are praying on people who are in other words are desperate. They are overwhelmed with their situations and are being sold on an easy way out of debt.

    With all of my clients I make sure to let them know that this is a serious matter that does have negative effects. The fact of the matter is that most settlements do happen after charge off because most people don’t have the money to pay off the settled amount.

    Most companies will have you set money in a trust account or joint account each month. Why anyone would do this is beyond reason. It is no different then you sending that money to the settlement company to hold for you. What do you think is going to happen to that money if that company gets shut down? What do you think the odds are that anyone will ever see that money again?

    This is why it is important for people to understand that a debt settlement program is not the best choice for everyone because it will have a negative effect against your credit. A debt settlement program should only be used by people who are in a hardship situation and can’t afford to pay the minimum payments.

    Most of the debt settlement companies out their will tell you one thing and do something completely different. For example if a creditor decides to take legal action against you they can no longer negotiate that account for you.

    At that point only you or a lawyer can negotiate that account. Do to the fact that these companies are not law firms and most do not have attorneys it is called unpracticed license of law and even if that company has one attorney he may only be licensed to practice law in their state not necessarily your state.

    Debt settlement can be a great option for people who are in a situation where they can no longer afford to make payments but if you are looking to use it because you don’t want to pay then you are in for a surprise. If you have used your cards for cash advances only or have in a short period of time taken out large cash advances and think that
    the creditors are going to just let it go.

    I have even heard of companies telling people to go ahead and pull out the remaining balances in cash advances or use the card to pay the fee’s for the program before you start. This is a quick way to make your situation a lot worse.

    Just like any type of industry there will always be companies who are only their to take your money and run. This is why it is important to take the responsibility to research any company before signing up with them.
    .-= Joe Sellers´s last blog ..We should be thanking the credit card companies for all that they have done for us over the years =-.

  2. Steve.

    Great job in posting all of the articles on your site. I would like to go into the business of helping people with debt settlements and/or debt management but I have hesitate because I have noticed many misleading and downright fraudulent advertisement that is going on. I am not against making a living but it should be an honest living. I enjoy helping people dealing with these issues but just as important I want to be able to do this in an honest and sincere way. If you have any suggestions how I can get started in this business please let me know. Miguel

    • Miguel,

      This would be the worst time to get involved with being a debt settlement provider of services. I would urge you to wait at least a year and let all the upcoming regulations and legislation to become effective and then you can make sure that the business you would create would be legally compliant.


  3. Ryan,

    Your comments on lies and deceptive advertising are well received.

    Your comment:
    “yes they will take term settlements over a period of a few months, but if the client can bring together enough money to settle all 20,000 in debt in less than 6 months to avoid charge off for sake of better credit, do they really have a financial hardship, or are they trying to manipulate the system?” does not track well with the discussion thus far.

    Your comment of Aug. 27th is what my comments were contemplative of.
    You outlined a hypothetical, but realistic, consumer debt scenario. I showed where the typical fee model used by the industry would prevent 2 of the 4 accounts from being settled inside of 6 months and prior to charge off (actually, while considering the terms, they would not be fully settled until month 8-9 but would still avoid a charge off being reported).
    You have some how leaped to all debt settled inside of 6 months, which was heretofore not considered.

    I too, am in support of free market principles, which were reflected in your above comment:
    “If somebody doesn’t want to take the time to handle their situation, and trusts the job gets done right the first time, and then they will pay, it’s just that simple.”

    My point has been; Using a fee model that is skewed most heavily to that of the service provider, with an assumed obligation to act in the best interest of the consumer, and while having full knowledge of opportunity loss while concerned more with fee collection, is disingenuous at best and “kinda scammy” at worse. Please remember we are talking about consumers who are least positioned to absorb the high fees that are passed on to them.

    My opinion of fair fees, while weighing equal consideration to the consumer and the service provider, would be similar to the fee ligislation passed by Colorado last year.

    Colorado took the NCCUSL proposed Debt Management Act, tweaked the fee structure lower than originally set forth by NCCUSL, and enacted some pretty good law.

    Several other states have similar legislation under consideration.

    The FTC has propsed rules that would have a much greater impact on the fees charged by the settlement industry, were they enacted as currently proposed.

    What are your thoughts on the NCCUSL Act, and it’s adaptations accross the states? What thoughts can you share on the FTC proposed changes to the existing TSR and the implications associated with passage of the rules, if passed as is?


  4. Just Curious,

    I don’t hold anything hostage for our consumers, you’re right a letter and proof of payment are valid, but most certified debt arbitrators will generate a letter which is more beneficial to a client in regards to credit reporting.

    It’s not the debt settlement program fees that are the problem in this industry, the true problem lies in deceptive or misleading advertising, which gives consumers false hope. After all I do believe that’s why Steve had originally made this post. I don’t advertise to have the secret the creditors don’t want you to know about, or solicit this to be part of some government bailout- it comes down to basic math and common sense. I don’t sell my services, I allow my clients to choose what’s best for them; based on factual advice and real industry experience I have obtained from being on both sides of the fence, for the creditors & debt settlement companies.

    You’re right the willingness to settle a debt is an entirely predictable event when an account goes unpaid, so IF WE ALREADY KNOW IT’S GOING TO HAPPEN ANYWAYS, why would I be in the wrong to charge fees for negotiating and settle their debt? Yes there are great offers out there, yes they will take term settlements over a period of a few months, but if the client can bring together enough money to settle all 20,000 in debt in less than 6 months to avoid charge off for sake of better credit, do they really have a financial hardship, or are they trying to manipulate the system?

    Most people buried in credit card debt don’t know where to start and how to best engage with their creditors, which is why they pay someone like me to help them resolve the matter. If somebody doesn’t want to take the time to handle their situation, and trusts the job gets done right the first time, and then they will pay, it’s just that simple. No matter what they will save time and money while removing the burden of credit card debt, and if they want to tackle it on their own, more power to them.

    I understand you can’t see my point of view in this matter- most people believe you can’t put a price on convenience, or time, which is what my company offers when they choose debt settlement as their road out of debt.

    There are many things we can all choose to do on our own, and some things we would rather have someone else do, if the fees are a problem, what do you feel would be a “fair fee structure”?

    Ryan Ortega
    .-= ryan ortega´s last blog ..To pay or not to pay that is the question- Tip #1 =-.

  5. Ryan,
    I appreciate your comments and the time it took to compose them.
    You are better in your description than most.
    It appears your company charges either all of the first, 2nd, and 3rd payments in fees, followed by a portion of monthly savings there after. Not Good, at least not for the consumer.
    The example you gave was perfect. Thank you.
    Here is the rub:
    Several creditors settle for less than 50%, as I am sure you are aware. Many also offer terms with the settlement, providing for the reduction AND 90 days to pay it off. So, given your example, a consumer would likely be successful settling 2 accounts pre charge off, but for the fee structure paid to your company and many like your company. Your example only backed up my prior assertion.

    I totally agree with you on the misplaced focus on ones credit score while drowning in debt. All the same, one should not take their eye off the ball, or their future. Settlement is a great option for those whom the option is a good fit. Maximizing the benefits of this option are often inhibited by those who are offering to help. The fees charged by the vast majority of companies, including yours from the sound of it (though you have not really disclosed your fees-hmmm) create an obstacle from jump street.

    When I go to a mechanic, I pay when he is done, not before. Your getting paid well before the consumer can take your settlement for a spin. In fact, your spin date is completely unknown. Your analogy supports my point, not your own.

    I disagree with you about your “work done” comment.
    Your work did not bring a creditor or collector to the point of reaching willingness to settle for less than the balance owed. That willingness is an entirely predictable event when an account goes unpaid. You did nothing unique here. It was going to happen without you.

    How does having the “right letter” to prevent future collection of settled debt work? Do you hold the settlement letters you get for consumers hostage, or something? The letter documenting the settlement, as well as proof of payment, is all one needs to prevent this.


  6. My company is not like most, we engage with creditors when it is beneficial for our client, remember a bank is not willing to settle unless somebody has money to pay them. With a 7 year background in credit collections I understand how willing creditors are to settle prior to charge off, however many clients would not have enough money saved up prior even if we had no upfront fees.

    For example Let’s say someone who was paying 600/mo with a total of $20,000 @ 20% apr (which if they could afford would take 4years and equal 30,000) on 4 cards and was only able to afford 400/mo on a debt settlement program(estimated 3 years and $13,000). Even if there was no fee charged (by the way does anyone you know works for free?), that means you would have 2400(400×6), which might settle one account for 50%. This is only one of 4 credit cards, still leaving 15,000 in debt to be taken care of. It is nearly impossible to reach agreements with all creditors prior to charge off due to a client’s financial hardship, which is often times why settling with the collection agency makes more sense.

    We do not apply all the money saved towards nothing but fees for 6 months. Our down payment fee may be made in one, two or three months. Many credit card companies send out letters to their customers advising the possibility of settlement, so if a client includes their settlement coach with this communication they are not kept in the dark. The potential to go legal exists when a creditor feels it is cost effective to pursue the matter. This may take place after 30 days of delinquency or years later, depending on state statues, an account isn’t required to charge off prior to legal action. Is the best lifetime you refer to avoiding charge-off? If so it sounds like you may potentially be worrying about credit when the focus should be on eliminating troublesome debt, that isn’t helping a credit rating anyways. No matter what there is going to be some time involved to rebuild credit with or without charge-off that’s just common sense.

    A mechanic fixes a car, but does not let the car leave his shop without payment. Does that make him part of the problem because you can’t get to work until you pay to fix your car? Or was the problem from a car accident? Maybe it was overuse, abuse or a lack of maintenance on the car?

    If a debt settlement is negotiated with a creditor, a client may decide to turn around and directly pay them to take advantage of our work done. The creditor will not decline their payment because they have not paid us for the work (phone calls and negotiation). Our fee structure is designed to ensure we are paid for work and efforts made while keeping the client’s best interests in mind.

    In the end, dealing with creditors is a daunting task for most people; customer service is already tough for simple requests and it does not get any easier once collection time kicks in. It is true anyone could do it themselves, but will they have the time? Know what to say, how to say it and when to say it? Have the right letters to prevent future collection of a previously settled debt? Not be emotionally attached to a “fair deal” or keep their cool on the telephone?

    These are time and emotion saving factors that I believe are well worth the costs of becoming debt free in less time for less money by using debt settlement.
    .-= ryanortega´s last blog ..To pay or not to pay that is the question- Tip #1 =-.

    • Ryan,

      Isn’t the charge-off a function of federal timing rather than anything under the control of the state? I believe it results from regulations promulgated by the Office of the Comptroller of the Currency (OCC) and was enacted after the S&L crisis in an effort to require financial institutions to mandatorily report non-performing loans rather than hide them in their books.


  7. The average “flat rate %” you reference in your reply, is 15% of the total debt submitted into a debt settlement program. That high a fee, no matter the time frame collected (yours spread out over half the assumed length of the program), means it takes longer to settle. If your company is like most, you dont even try to negotiate a debt until after charge off, where you will be dealing with collectors. As a result of this practice and the first 6 months of paying yourself the fee, best lifetime offers that are available direct from the creditor are missed because the consumer did not know they were availabale and even had they known, they may not be able to be funded because you are collecting your fee and there is not enough in the savings account. This results in one, perhaps 2 accounts that pass into charge off, where the risk of litigation are very real, that could have been settled prior and removed that risk. It also results in a charge off that did not necessarily need to have occurred which will increase the length of time needed for the consumers credit to recover.

    For these simple reasons, and more, your fees are part of the problem.


  8. Just Curious,

    I’m wondering why you would consider me part of the problem based on my answer? Charging fees to do a job for somebody is how many people make a living in our country.

    Everyone from a handyman to a lawyer are experts in their field and offer a service that people could choose to do on their own, however they might lack the skill and knowledge on how to do it right the first time and every time.

    There is a flat rate % of the debt owed charged for our services. Our fee term is spread out over half the program, so clients may save funds and pay fees together.
    We have no hidden settlement fees, and all charges are clearly disclosed by myself and in our contracts.
    .-= ryanortega´s last blog ..To pay or not to pay that is the question- Tip #1 =-.

  9. Ryan,
    You seem like a good enough guy in the industry.
    What does the company you represent charge for their settlement services?
    Depending on your answer, you may still be part of the problem.


  10. There is a huge SCAM, a multimillion dollar SCAM, being forced on the american public!!

    And our legal system is in on it!

    third party debt collectors!!!

    When you stop paying on a credit card debt,
    The original creditor is mandated by federal law, to charge-off an account when no payments have been received for 180 days.
    That date is refered to as the ‘Date of Last Activity (DLA)’ and reported as such, to the credit reporting agencies by the creditor.

    After they write it off, they “Bundle” all these uncollectable accounts and sell them for pennies on the dollar on the open market, this is where the 3rd party debt collectors come in.

    They BUY a “BUNDLE” of this uncollected debt info from the original bank.

    However what they buy is your name, account number, and what you owed to the original bank.

    They rarely or never get your “original signed contract” with the credit card company, your last statement of payment on the account, and the original writeoff amount.

    This is what they need to “PROVE” in court that they now have “TITLE” to your original debt.!!

    This information is usually sold several times within the “networks” still as a BUNDLE
    of uncollectable debt!

    They will harris you on the phone, send threating letters, saying that they represent
    “XYC LLC” who now has title to your Bank of Bundi account in which you owe some
    ridiculous amount.

    First off the “XYC LLC” company is usually some “shell” company that the collection law firm has setup, because by law, the law firm itself cannot hold title and try to enforce a judgement against you.

    So they have to “represent” a client who holds title, so they claim against you.

    The law they are trying to collect on is “CONTRACT” law,,which requires them to have “the original signed contract”, and the “deeds of transfer”, indicating your account specifically with the “deeds of transfer”, and a copy or original of your last statement, indicating your last payment on the account, and the “charge Off” amount. Which the original bank “wrote Off” its books.

    They never have any of this information, what they present to the court is a hodge podge of information, a pasted piece from an excell spredsheet with your name, address ect, usually 2 pages sideways, “certifications” which are assembled by their own staff on their own computer systems, including usually an amount you owe which they assembled from their own computer system. From this “Budle” they bought for pennies on the dollar!!

    The problem is unless you “ANSWER THE LAWSUIT” Requiring you to file an answer to the suit, contesting the “CONTRACT CASE” Pay the $15.00 fee to the court, and Show up on the Date of the court hearing and contest the case by demanding that they supply the original contract, deeds of transfer, and last payment statement,”
    indicating your account “specifically” and the “charge Off” amount…

    They will request a default judgement from the Judge..and he will grant it!

    I have specifically fought 3 cases against me, taking several court dates, time off from work, endless hours of waiting, but they realized
    I knew what I was talking about and that they could’t proof their case,
    IE get over on me…and they dismissed their suits…
    go here….
    here Collection Agencies Illegal Practices ~ New Jersey
    and here

    and here

    and here for a expose on tv

    The reason the courts are usually on their side is “MONEY”
    each time they file its $15.00 fee, each time you answer its $15.00 fee,
    multiply that times the thousands of collection cases and you can see how the courts make money..not to mention that its a “Buddy” system..

  11. Steve,

    Great way to expose the lead generation guys, it is one piece of the problem creating a bad name for the debt settlement industry. They set unrealistic expectation up front, such as 70% debt reduction or terminating all creditor phone calls immediately. There are a number of bad actors in the industry, paying employees who really don’t know exactly how and why the services work and preying on misinformed consumers who are in panic mode about their growing credit card debt loads.

    This is something my company Common Cents Credit Solutions does not participate in. Although debt settlement is an unregulated industry, I have certification as a debt arbitrator- (which you already become a pro at doing 7 years of debt collections), and completed compliance training which preaches “full disclosure” (per the ftc) about debt settlement consequences. There is no fine print in our contracts, while others in the industry use the same tactics the credit card companies did to trap consumers into debt in the first place.

    You see in order for debt settlement to work it must be the right choice for somebody, and it is not a fix all program. There are consequences and benefits, such as every debt relief option has, and so it becomes whether or not the client themselves feels comfortable with their decision and are prepared to take on the challenge ahead based on solid accurate advice.

    In the end debt settlement is a viable option, and not a scam, unless a consumer decides not do their homework and chooses to work with the wrong team based on incorrect information. Remember when you’re in debt, your intuition is your best friend- not the salesman on the phone!

    .-= ryanortega´s last blog ..To pay or not to pay that is the question- Tip #1 =-.


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