An Emperor who cares for nothing but his wardrobe (Debt Settlement Companies) hires two weavers (TASC and USOBA) who promise him the finest suit of clothes from a fabric invisible to anyone who is unfit for his position or “just hopelessly stupid”. The Emperor cannot see the cloth himself, but pretends that he can for fear of appearing unfit for his position or stupid; his ministers do the same.
When the swindlers report that the suit is finished, they dress him in mime and the Emperor then marches in procession before his subjects. A child in the crowd calls out that the Emperor is wearing nothing at all and the cry is taken up by others. The Emperor cringes, suspecting the assertion is true, but holds himself up proudly and continues the procession.
There could not be an old tale that more perfectly describes exactly what TASC and USOBA is doing to the debt settlement industry and consumers alike, as this one by Hans Christian Andersen.
If you are a new reader to this blog, you will need to read some of my previous articles dealing with TASC and USOBA to understand that even though they purport to be industry regulators and consumer protectors, in reality, they are nothing more than well funded trade associations interested in keeping the status quo. The “status quo” being the continuation of front loaded fee structures that line their pockets and do little if anything to help consumers. Unless you consider an expensive lesson to be a consumer benefit.
I could literally write a book on the actions taken by both TASC and USOBA over the years to continuously block and attempt to derail any form of meaningful regulation to protect consumers. However, a consumer needs to look no further than their current reactions to the new FTC rule that would ban these ludicrous front loaded fee structures, utilized by most of the members of TASC and USOBA, to understand where their true motivations lie.
There is plenty of information on this blog and also over at GetOutOfDebt.org to make an open and shut case that TASC and USOBA are at odds with what consumers need. So I am not going to get into those details in this article. At this point, I consider it a given that TASC and USOBA are against consumers if it affects the bottom lines of their member companies and my analysis in this article will reflect that view.
What I want to cover is how TASC and USOBA, if allowed to continue their shenanigans will do nothing but limit viable debt relief options for consumers and cause further confusion in the market place.
TASC, USOBA and most of their member companies continue to advance this ridiculous notion that charging consumers all of their fees before a majority of the work is performed is in the consumers’ best interests. This self serving assumption is so ridiculous on its face that I can’t believe I actually have had to spend time writing articles to explain to them why it is devoid of any facts or basic logic.
For awhile I figured TASC and USOBA would at some point realize that regulators and consumers alike have long ago figured out that the Emperor has no clothes and would stop pushing obnoxious assertions to the contrary. Sadly, I have now concluded, that they are married to this ideology and are not going to back down until they are out of business or the regulators put the entire industry out of business.
There is no arguing that a debt settlement strategy has its place in the debt relief quiver of arrows and that there are a few good settlement programs out there that provide legitimate help to struggling consumers under the right circumstances. However, if TASC and USOBA continue pushing back against all meaningful regulation, they will leave regulators no choice but to continue to push for more regulation that in all likelihood will put all settlement companies out of business. That will certainly not be beneficial for consumers. I believe the current rules passed by the FTC are enough to rid the industry of almost all of the bad players in the market place with just enough wiggle room for legitimate companies to still operate a viable and profitable business.
However, if regulators feel that the industry didn’t get the message with the new FTC law and they continue to hear about all the ways TASC and USOBA are trying to figure out how to get around the new laws to continue ripping off consumers, they are going to come in with more regulations. Including potentially capping fees so low that a legitimate company might not even be able to remain viable and be forced to close the doors to the detriment of consumers seeking honest assistance.
With TASC and USOBA committed to this argument that front loaded fees are the only way a settlement company can operate, it is clear to me that in order to protect consumers, TASC and USOBA must be put out of business. They seem so far detached from reality that I don’t really see another way.
TASC and USOBA are funded directly through debt settlement company membership dues. Settlement companies that are members of these associations often pay thousands of dollars a month and that money is used directly by TASC and USOBA to block efforts to curb the consumer abuse in the industry and ironically to also convince the public that TASC and USOBA members are the good guys and really looking out for them.
So to protect consumers I am calling for an immediate boycott of all TASC and USOBA member companies, and I will give you 4 good reasons why:
1. USOBA has already admitted to the FTC that if an upfront fee ban was passed that 85% of their members would go out of business. This alone is a good enough reason never to enroll with a member of TASC and USOBA. That law has now passed and will be in effect by October 27th. According to USOBA many of their members aren’t likely to be around very long now. As a consumer, are you willing to take the gamble knowing that there is an 85% chance the company you are paying fees to every month will not be around to help you next year?
If you are currently enrolled in a settlement program who is a member of TASC or USOBA or any settlement company that front loaded their fees, this should send a bit of a chill up your spine. You might want to rethink whether or not it makes good financial sense to continue sending your monthly payments into a program that is likely to be out of business because they can no longer charge fees upfront.
2. TASC and USOBA members use your money to pay the dues to these two trade organizations to go out and fight against consumer protection regulation. Every time you do business with and send money to a TASC or USOBA member company, you are paying for these guys to go out and try to prevent all meaningful efforts to keep consumers from getting ripped off.
3. TASC and USOBA members are guilty of false and deceptive advertising. They claim that membership in either TASC or USOBA means that they have somehow been vetted or are approved by some industry regulator. However what they don’t disclose is that this so called regulator is just a trade organization that they pay monthly dues to. Somehow that strikes me as a bit of a conflict of interest. Unfortunately though, it does the job of helping to convince unknowing consumers that they can trust that program with their family’s financial future.
4. If TASC and USOBA are not put out of business, I believe that their actions will eventually cause regulations that are so strict, that most consumers will be unable to find legitimate help if a debt settlement strategy would be beneficial to them.
There really is no question in my mind that it is absolutely in the consumers’ best interest to have TASC and USOBA discontinue the actions that they are taking to thwart meaningful and necessary consumer protections, and the only way that consumers can accomplish this is to immediately stop sending your money to their members who turn around and send it to them. The FTC gave TASC and USOBA years to lead the charge for meaningful change and they did nothing but fight against it.
Now let me talk directly to TASC and USOBA members. Does TASC and USOBA represent what you stand for? If so, than good luck. If TASC and USOBA does not represent what you stand for, than get out of these associations now and stop funding them. I have heard debt settlement companies claim that membership in TASC or USOBA is the only way they can show credibility to potential clients. Excuse my language, but WTF??? The only way you can show credibility is to run a con on consumers and tell them that TASC and USOBA is looking out for them and since you are a member then you are a good company? Have you ever heard the phrase “guilty by association?” If I was a debt settlement company, the last thing I would want on my website is some TASC or USOBA badge telling consumers that I also believe it is a major tragedy that I can’t charge them all of the fees before I provide the promised service.
You want credibility? How about not front loading all of your fees for a start? How about charging consumers when you get them a great deal and do what you say you are going to do? How about making sure that a large number of your clients actually get the results that your sales people are promising them? How about that for credibility instead of some stupid badge on your website? Give me a freaking break.
Members of TASC and USOBA need to now make a choice.
It is clear what TASC and USOBA stand for. Do you stand with them or do you stand with consumers? You must chose, you cannot play both sides any longer. You cannot flip flop and issue press releases about how you are excited about the new FTC rules and how you have been looking forward to this regulation because it is so great for consumers and then turn around and send thousands of dollars a month to organizations that are fighting tooth and nail against these laws that you are now a supposed champion of.
I have recently seen several press releases from New Era Debt Solutions claiming to be the first company in compliance with these new FTC laws and how they are excited to see this regulation because it will protect so many consumers.
New Era Debt Solutions is a pretty large debt settlement company and also a long time accredited member of TASC. I don’t know the exact amount of the membership dues that New Era pays TASC every month, but any company that has more than 10,000 active clients pays in a little over $10,000 a month. My guess is that New Era pays somewhere close to that but I don’t know how many active clients they have. However, that or anything near that is a whole lot of money for a company to be shelling out.
I am not sure how they can have these views, applauding the FTC for taking this action and still send TASC around $10,000 per month to fund the fight against these new laws. TASC has been openly fighting these regulations for a long time and yet New Era as an “accredited member” of TASC still continued the funding. Why?
I have no idea but wouldn’t it be great if New Era and other TASC and USOBA members would redirect those hundreds of thousands of dollars a month and rather than funding associations that openly fight these needed regulations, instead use the money to issue press releases and other educational material to warn consumers about the dangers of the settlement programs that TASC and USOBA represent?
I don’t have $10,000 per month available to spend to counter act the public deception machine (as I call it) that TASC and USOBA puts out, but New Era does. Are they willing to use this money they are collecting from their clients to further public education or simply continue funding the public deception that TASC and USOBA represent? Only time will tell.
UPDATE 10-13-10 – New Era Debt Solutions has publicly denounced TASC and resigned from Membership. They recently attended a TASC industry meeting where they witnessed the public deception of TASC first hand and in all its glory. TASC was as usual trying to teach their members about loop holes around the new FTC law to allow rip off settlement programs to continue to charge upfront fees. I must applaud New Era for taking a public stand against TASC and hope that this will be the catalyst to wake up any other legitimate settlement companies to get on board with the TASC and USOBA BOYCOTT or cry me a river when Schumer’s bill rolls into town and puts you all out of business. If your company has recently realized the damage that TASC and USOBA is doing to the industry and consumers alike, please renounce your membership and let me know about it by leaving a comment below.
I may have started as a lone voice in the street but now consumers, regulators and even the Emperor himself is starting to figure out that “The Emperor definitely has no clothes on.” Do you feel a draft?