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Would it help Americans if the government eliminate debt relief?
By plrprousers | December 2, 2009
The Downfall of the Credit Card Debt Negotiation Business: FTC to vote on restructured regulations.
The entire sector shouldn’t be penalized for the scumbag tactics used by only a small amount of services. The FTC has recently proposed new restrictions involving the debt settlement branch that will prove to be crucial in the downfall of the industry if enacted. A vote will be held in November this year with the intentions of implementing provisions that will advantage American debtors looking for debt relief. But can it actually assist consumers to almost kill the method of signing up with a company to negotiate debts for you?
The leading trade organizations helping debt negotiation/settlement firms have endorsed extracurricular studies to find out the usefulness and overall promise of the debt settlement industry. Both TASC (The Association of settlement companies) and USOBA (United States Organization for Bankruptcy Alternatives) are attempting to provide the true benefits of debt settlement to the FTC and to not allow the legality of these heartwrenching restrictions.
Debt settlement companies do work on consumers’ behalf to settle down unsecured accounts, such as credit card debt, personal loans, lines of credit and doctor bills. They work wonders for a segment of Americans with difficult hardships, like health illnesses, losing a job, bad marriages, or death of a spouse.
Most of the restrictions that the Federal Trade Commission looks to put into action—including a ban of retainer charges— would pretty much eliminate this viable option for consumers who are having hardships with consumer credit card debt. The Association of Settlement Companies outlined in a brief historical performance numbers the economic value its member agencies give to customers signed up with debt settlement programs, and it is clearly illustrated. For example, based on a new data research of its members, TASC can prove its members negotiated more than 94,000 accounts totaling more than $553 million in debt in the first half of 2009. This is an annual estimated amount of more than $1.1 billion in consumer debt negotiated by TASC members for just this last year alone. A multitude of other data compilations also clearly put forth the advantage of the debt settlement sector as a whole, showing the positive impact of the financial system in general.
USOBA has supported research projects of the debt settlement branch by Dr. Richard A. Briesch, an Assistant Professor of Marketing at Southern Methodist University’s renowned Cox School of Business, unfoiling the study named “Economic Factors and the Debt Management Industry” earlier this month. He looked over an independent objective assessment of the benefit to Americans, if any, provided by debt settlement companies. In going over specific sources of concern in the debt settlement sector, such as client graduation rate of debt settlement programs, service fees, the quality of settlement officers, and general consumer benefit, Dr. Briesch came to the conclusion that debt negotiation can offer significant value and benefit to Americans even more so than what credit counseling can provide.
Dave Leuthold, Executive Director of TASC said “Debt settlement has been and should remain an option for the tens of thousands of consumers who are facing financial difficulties. Especially in this tough economic climate, consumers should have more financial tools at their disposal, not fewer.”
Commissioner J. Thomas Rosch of the FTC also confirms that the Debt Settlement sector has an important role to play as he said “For example, a debt settlement firm can negotiate on the debtor’s behalf, particularly in predicaments where debtors are embarrassed , self-conscious, or even afraid to phone their collectors directly. A debt settlement agency also may be able to offer personalized care to debtors, adopting a wholesome approach to all of the consumer’s credit card debt owed to several creditors, as opposed to just the sum owed to a particular creditor. Taking care of the whole debt portfolio and focusing on repairing the client’s financial health has always been a critical value proposition of debt management professionals.” Rosch continues to speak about various recommendations to the industry that can assist in lowering the problems by debtors, since it is the complaints that antagonize the FTC and other government bodies like the Attorney Generals’ offices, State Bar Associations, and the Better Business Bureau to scrutinize, report, and bring the law down on the companies dealing in the industry.
The FTC does not need to put regulations in place to help debtors because there are multitudes of sources to research when finding a worthy service to helps you out of debt. Also, you must realize that a agency that is a member of either TASC or USOBA would be a safer bet because these associations were created to shield debtors and to ensure that their partner services are working to a higher level.
Obviously, some companies offer differing plans and fee set ups that will suit different people according to their specific needs, but after the proper research is done, the chance of signing up with a scammer organization is greatly lowered, if not completely eliminated. Debt settlement has proven to be an option that assists people; it would be a misstep to debtors to all out eliminate the industry by passing over the top restrictions.
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