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Do Regulators Treat Debt Relief Companies Unfairly?

By on May 20, 2016

I was just sitting down with a friend in the debt relief industry who leans a lot further right than I do as a liberal lefty. I always enjoy the alternative point of view conversations on topics and that person does always make me smile because of the diverse points of view we often have on the same debt relief issue.

In the past I’ve been accused of being too tough on debt relief companies for a wide variety of reasons. But I’ve also been on the other side of the debt relief industry as a credit counseling company president and have experienced the struggles from that side. I’ve been open about things I’ve learned and opportunities to have done some things better. See this and this.

But between the relationship of consumer, debt relief company, and regulator; there is no perfect relationship.

Stone Balance

No matter how a balance is attempted to be struck, one or more parties in this precarious relationship are going to be unhappy at any one time.

Here is the way I see the relationships with the good and bad nuance from all the players:

Good Debt Relief Company: We just want to do good things and get paid a fair rate for assisting the consumer with great advice and assistance.

Bad Debt Relief Company: We just want to ripoff as many people as possible and then vanish.

Good Regulator: We’ve run into this issue and we’d love for you to resolve this so our constituent is not unhappy anymore. If you can do that, we will go away.

Bad Regulator: We are just sick and tired of dealing with the majority of companies that hit our radar who never seem to try and correct the problem. So we are just going to go after everyone. This is going to hurt, a lot.

Good Consumer: I’ve run into a problem with the service or I’ve had a change in my life. Can you please help to remedy the situation or help me move forward in a positive way so I can leave happy?

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Bad Consumer: I don’t care what I agreed to, signed, or read. All of a sudden I’m in a panic and you are now going to be a scam in my eyes. It doesn’t matter that I’ve never done what I promised to do but now you need to do all the stuff you never promised to do.

It is realistically and humanly impossible to navigate these difficult waters unless each player enters the relationship with the following mindset:

Debt Relief Company: Keep our clients informed, maintaining good communications, and striving to always maintain happy customers is our number 1 focus.

Regulator: Not every company is a scam and I’m going to be fair in our encounters and give them a chance to fix the consumer issue before doing anything else.

Consumer: I accept responsibility for doing my homework and educating myself about what the best solution is for my situation. I understand the person I’m talking to at a debt relief company is a salesperson and I will listen to what they have to say using that filter. I will also take ownership in making sure my solution is rolling out as expected and will properly notify the debt relief company and give them a chance to fix it if a problem arises.

The only lesson to be learned here is the likelihood of all the good variations lining up at the same time is not to be expected.

So considering the fact an unhappy consumer can trigger an unreasonable regulator the only course of action any debt relief company can take is to put the satisfaction and happiness of the consumer first.

When bad or shady debt relief companies are allowed to exist, they simply shorten the fuse of every regulator they hit the radar of. Those bad companies bring down the good companies no matter how good of a job they’ve done.

So from my point of view, the best way forward for debt relief companies to preserve some future in this industry is to play a role in policing the industry, and put customer service first.

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So What Can The Consumer Learn and Do?

Ultimately the power to be happy when getting debt relief services rests with the consumer. They have the power to do their due diligence before signing any agreement for debt relief services and make sure they read the contract and understand what they are agreeing to. Consumers need to understand that it doesn’t matter what the salesperson tells you on the phone or what the website says, the most important document is the client agreement.

And consumers can also learn that life is not perfect and everyone can make a mistake. Before going ballistic, give the debt relief company a fair chance to repair the situation and fix any problem that arises.

If consumers are fair to debt relief companies and debt relief companies are fair to consumers, then there is little need for any regulator intervention.


If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

About Steve Rhode

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.

One Comment

  1. Bruce Mesnekoff

    May 21, 2016 at 9:09 am

    Thanks for Information about Debt Relief Companies. Your Article is impressive and very informative. I am now regular visitor of your website and bookmarked it.

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