Damon Day & Associates

Credit Answers canned by TASC-Runs to USOBA-We Need some Stinking Badges!

Damon Day — Tue, 17 Aug 2010 23:59:50 +0000

Hey USOBA Watchya Doing?

Credibility – The quality of being believed or trusted.

How does a debt settlement company acheive credibility among consumers? It seems to me that there are two ways. Option number 1 is to be honest, provide a great service for a fair fee, put the needs of your client above the needs of your own and over time you will naturally build credibility as the number of satisfied clients grow and word gets out.

Option number 2 is to purchase a lot of badges for your website and have your sales guys tell consumers that this means you can be trusted. It seems that most settlement companies simply opt to take the shorter path and purchase what I call “credibility badges” even if they don’t have a track record to support it.

It seems like Debt Settlement has created a little cottage industry of these credibility badges. I am not talking about the BBB or chamber of Commerce members. I am specifically talking about companies that seem to exist and get paid mainly to allow a settlement company to buy a “Credibility Badge.” You know, companies like TASC, USOBA, IAPDA, SRSOA. In theory, this isn’t a bad idea except that in my opnion these companies for the most part are doing nothing more than selling manufactured credibility to companies that aren’t able to earn it on their own. In other words, helping settlement companies con consumers out of money and getting a kick back in return.

In today’s “did you seriously just do that” moment I am going to point out a specific example from USOBA.

In light of the current regulatory environment in the debt settlement industry and USOBA’s complete lack of ability to bend reality to their liking, you would think that they would be on their best behavior. Well if this is their best behavior, I really cringe at the thought of what they must have been doing before I was paying attention.

A few days ago I was driving somewhere between Flagstaff Arizona and Santa Fe New Mexico and I hear a very deceptive ad from Credit Answers. The ad gives the impression that they are representing some government bailout program and urges people to call. I am familiar with the ad because I wrote about their television version of the same deceptive ad back in June of this year.

The point of my article in June was that not only was Credit Answers an “accredited member” of TASC at the time but the founder of Credit Answers, Bill Loughborough, was also on the TASC board. This was a big story because TASC had recently made a public statement condemning all of these misleading debt settlement ads and here was a member of their own board that was doing the exact thing they claimed to have a zero tolerance for. The day after I wrote that article, I received an email from TASC informing me that Credit Answers was booted from TASC membership and that Bill Loughborough would no longer be serving on the board. I figured that would be the end of it.

So now fast forward two months later I am in my car and hear this ad again. Now I am thinking, “Is Credit Answers out of their mind for running a clearly deceptive ad like this when regulators are out on the hunt just itching to make examples out of companies that are in violation of new deceptive marketing laws”? The only reason I figure that a company would be this crass would be because they plan on going out of business shortly and therefore don’t have to fear that the regulators will put them out of business.

By the time I reach my destination my inner dialogue has convinced me that Credit Answers must be going out of business and therefore has little regard for compliance issues that any legitimate company hoping to remain in business would take very seriously. I of course can’t prove this because I am not privy to their books or management meetings, but perhaps someone can offer any alternative explanation for these actions. So I set out to write an article warning consumers of this very odd and seemingly unexplainable behavior by Credit Answers and that’s when things got interesting.

I found a press release issued by Credit Answers written on July 6th, 2010, just about a month after my article and the action by TASC to yank their membership and boot Loughborough from their board. Are you ready for this? I will let the press release speak for itself with just a few of the following gems. Remember, this is less than a month after TASC booted them for deceptive advertising.

PLANO, TX, July 06, 2010 /24-7PressRelease/ — The United States Organization of Bankruptcy Alternatives (USOBA) has selected Credit Answers to be a member of their prestigious organization. Exceeding all standards in the settlement industry, Credit Answers stands out as one of the best settlement firms in the country.

“We take our commitment to our clients very seriously at Credit Answers. It is very humbling to be acknowledged as member of a great association like the United States Organization of Bankruptcy Alternatives. At Credit Answers, we will continue to strive to bring our clients the respect and service they deserve. In today’s world, it is vitally important for consumers to have the ability to choose how to manage their debt. With USOBA recognizing Credit Answers, our clients know that they are getting the best settlement service available from a reliable company,” said Bill Loughborough, CEO & President of Credit Answers.

About USOBA

USOBA and its members support additional regulation of the debt settlement and negotiation industry. USOBA supports efforts by the States and the Federal Government that ensure strong consumer protections, while preserving the ability of honest, ethical providers to serve consumers in need.

- USOBA is an independent and neutral association with a vested interest safeguarding American consumers by preserving debt settlement as a viable debt relief option.

- Members of USOBA are consumer protective, compliance oriented and continuously evaluated.

- USOBA uses various compliance programs and resources to promote best practices, consumer protection and regulatory compliance.

Credit Answers has been selected as one of the leading credit and debt professionals of the Western United States by Goldline Research and is a proud member of The United States Organization of Bankruptcy Alternatives.

So let me make sure I understand what just happened. Credit Answers has been running and continues to run a very deceptive ad to push what the GAO would likely call an over priced and under performing debt settlement program on American consumers. After their actions were exposed, requiring TASC to issue warnings to them, they continued the misleading ads giving TASC no choice but to kick them out and remove their founder from the TASC board. Then less than a month later USOBA welcomes them with open arms?

I have some questions for USOBA.

1. Can anyone buy a USOBA badge for their website or do you have specific standards for membership?

2. Were you aware that Credit Answers was kicked out of TASC less than 30 days before you accepted them?

3. Have you looked at the Credit Answers commercial on the FRONT PAGE of their website?

4. Do you find their commercial to be perfectly acceptable and in compliance with former and current regulations?

5. Do you think accepting members like Credit Answers when they are actively running deceptive advertising campaigns will help or hurt your credibility with regulators?

6. Why won’t you publish a list of your members?

7. Why can I not confirm whether or not a company is a member of yours unless I give you my name and email address?

At this point it isn’t like nobody knows what USOBA is really all about, but given their desperate attempts to remain relevant, one would think that they would at least try to not accept members who have been and continue to run misleading ads that have been the recent target of much regulatory scrutiny. Does Credit Answers or USOBA think that regulators don’t have TVs or radios?

Unless USOBA can offer a better explanation for their actions, it seems to me that they are simply selling FAUX credibility website badges to assist deceptive operations like Credit Answers. Armed with this new illusion of credibility, Credit Answers continues the front loaded fee con and provides a healthy annual fee kickback to USOBA for their participation in the rouse. And the USOBA Public Deception Machine rolls on.

As a consumer, look at a companies actual track record for credibility and not simply their stinking badges?

Time to Boycott all TASC and USOBA Members – The Emperor Has No Clothes

Damon Day — Wed, 11 Aug 2010 01:57:47 +0000

TASC and USOBA do Great Work don't they?

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:

Consumer Boycott of TASC and USOBA members

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.

Chose Education or Deception

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.

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?

Debt Settlement Business for Sale – Are you Feeling Lucky?

Damon Day — Tue, 10 Aug 2010 19:04:15 +0000

I just ran across a story about a 13 year old debt settlement business for sale in TX. I wonder if it is possibly connected to the new FTC law going into effect on October 27 of this year that is going to prevent these guys from charging all of their fees upfront?

Funny the for sale ad doesn’t mention anything about that. I really hope some uninformed young entrepreneur does his homework on this industry before buying a business that from the ad, does not look viable at all given the current climate. Here are some excerpts from the ad:

The Sale price is only $69,000

The ad claims Revenues of $87,000

and cash flow of $42,000

Business Description

13 year old Dallas Texas based company for sale specializing in consumer and business debt settlement. We operate nationwide with the exception of a few states. Our sales team works to help clients live a debt free life by eliminating unsecured debt to pennies on the dollar by professional negotiations with their creditors. We accept clients with $10,000 or more in credit card or total unsecured debt. The national average consumer debt amount equals $30,000. We charge fees of 14.9% of the debt enrolled. This creates residual income over a period of 12 to 15 months. Leads are driven through debt specific lead vendors, online search engine optimization efforts, and referrals from affiliate relationships with mortgage, loan modification and credit repair companies. The market is filled with businesses, families and individuals whom are experiencing financial trouble and in need of these services. The company has no debt. Cash flow information will be available to serious inquiries.

Wait, back this truck up just a second. Lets look at this business model. They charge 14.9% of a clients total debt and this provides residual income over 12 to 15 months. Ok, so this business model will be illegal on October 27th of this year. So for $69,000 some lucky entrepreneur can be the proud owner of a business that is not in compliance with federal law, and get nothing but angry clients that have already paid their fees and are now looking for the promised services.

Well, maybe it gets better for the poor entrepreneur, lets look at the ad again:

Expansion Potential: Tremendous upside potential during the present difficult economic conditions and stable growth during normal economic expansion periods. With more advertising revenue committed toward sales, revenues can be dramatically increased to over one million dollars per year.

Reasons for Selling: Owners have other business interests.

Employees: 3

Tremendous upside potential up to a million dollars a year? Do these guys have no shame? I don’t see any mention of the regulatory changes that will seriously impact this business model in the next two months. These guys seem to see the writing on the wall, and are hoping to lighten the wallet of some young entrepreneur before their business is worth less than nothing.

The owners have other business interests? Ya could it possibly be because their current ponzi scheme of a debt settlement program is about to tank when new regulations don’t allow them to collect this “residual income over 12 to 15 months?” Naw, I bet that doesn’t have anything to do with it.

If you are considering the purchase of a debt settlement program in this current environment, I just have one question for you. Do you feel lucky?

There is a reason these guys will be trying to unload them.

Free Advice to Usoba and Tasc members, get out or you will be put out on your ass

Damon Day — Thu, 05 Aug 2010 16:45:32 +0000

If I had to guess, I would say that I am probably unanimously disliked by every Debt Settlement company who is a member of TASC and USOBA and pretty much most of those who are not. Spend 5 minutes on my blog and you will know why. I call it like I see it, and what I see is a whole bunch of bullshit programs ripping off consumers. What really gets me going though is when these guys pretend that what they do is actually helpful to consumers in debt.

That being said, I am going to offer any Debt Settlement company that is a member of TASC or USOBA some helpful advice. Will they take my advice? Probably not, but most of them are going to go out of business if they don’t. Do I care about that? Nope, not a bit, don’t let the door hit you in the a** on the way out! If I don’t care if they go out of business, then why am I offering them advice?

Good question. It seems that in this rare instance, the stars have aligned and I have an interest that is running somewhat parallel to any debt settlement company who has an interest in self preservation. My interest is in helping consumers and I would imagine that most debt settlement companies have an interest in not going bankrupt. Huh? Let me explain.

It is no secret that I think TASC and USOBA are actually the cause of most of the problems in the debt settlement industry. Every day I have to read these press releases coming from these organizations who are the self proclaimed industry regulators and I just sit there and say “that’s bullshit and here we have some more bullshit, and wait this is, nope that’s also bullshit, and then they wrap up basically saying ”in conclusion regulators suck, we rule, go team.” I have this recurring nightmare of Ansbach pumping his pom poms and it is freaking me out.

I have been writing for quite awhile about how I felt these guys are much more interested in protecting debt settlement companies than they were in protecting consumers in any meaningful way. Now however, they don’t even try to pretend. They are out and upfront with the fact that protecting their upfront money to the detriment of consumers is their priority. I could point to 100’s of examples but I will just give you 2 from this week.

The FTC just passed a law that would ban debt settlement companies from charging front loaded fees. They have been ripping off consumers with this fee model for years, and not only has TASC and USOBA never done a single flipping thing about it, they actually promote this as the only way to do business! So the FTC finally has no choice but to step in because of the overwhelming evidence gathered over many years, showing that there is no question consumers are getting ripped off by the boat load.

John Ansbach, the legislative director for USOBA called this fee ban “a tragedy and a disaster for consumers.” David Luethold, the Executive Director of TASC said that “We’re disappointed that the FTC came out with this ruling, especially with regards to the advance fee ban.” Man oh man it is great to see consumer protection in action isn’t it. Look at these guys out there fighting on the front lines for the consumer. Oh wait, my mistake, they were saying that not allowing companies to rip of consumers in debt is a tragedy and a disaster. Yes, yes it is a tragedy and a disaster for the rip off debt settlement program.

Ok, so what is my great advice for members of TASC and USOBA? Pull the freaking plug already. Stop paying your membership dues and funding this ridiculous behavior. If you don’t pull the plug on these guys, I can promise you one thing, they will put you out of business. If you are crying in your soup about an advance fee ban from the FTC, just let TASC and USOBA keep running off at the mouth and give the bill currently sitting in congress a reason to get passed. You know the one that will also cap fees at potentially 5 or 10 percent of what consumers save.

If a simple upfront fee ban puts you out of business, then good, you should be out of business because you have been running your business like Charles Ponzi and you should count your blessings that you are not going to jail, where some of you belong in my opinion. However, if you are a legitimate company, and provide a good service for consumers, you should really not have much of a problem with the new FTC rules, but I want you to think about what a very restrictive fee cap would do to you. Ya, that would keep any legitimate business person up at night.

Personally, I feel the advance fee ban from the FTC was absolutely necessary to clean the crap out of the industry and it alone will clean up a lot of the major problems. However, I feel that a restrictive fee cap that takes all the profit incentive out of the industry would be absolutely detrimental to consumers, which is where my interests lie. There is a fine line between regulations that clean out the bad guys, and regulations that clean out everyone.

So it is clear to me that TASC and USOBA are “off the reservation” and I don’t know whose agenda they are pushing but I fail to see how they are benefiting their members. It is time to make a choice. You are either for consumers and you should denounce the actions of TASC and USOBA and stop funding them, or you are against consumers and you can stand behind TASC and USOBA and go down with the ship.

TASC and USOBA members, I am talking directly to you. Think about what has happened in the last 6 months. Has TASC or USOBA helped you or made it worse for you? Of course you are told to blame the FTC but think about why the FTC was forced to do what it did. Take a hard look past Ansbach’s pom poms and think about what is going to happen if they keep taunting the regulators with their bullshit. They know the front loaded fee model is bullshit for consumers, the regulators know it and even though you like it and won’t admit it, you know it is total bullshit as well.

TASC and USOBA should have seen this advance fee ban coming a long time ago and taken action to self regulate the industry before the FTC had no choice and imposed a total advance fee ban. Isn’t that why you pay them thousands of dollars a month? Aren’t they supposed to be protecting you and staying on top of these regulations? Heck I saw this coming over 2 years ago. If you don’t mind wasting thousands on membership dues for nothing, why don’t you send some of it my way? I will at least give you a heads up when you are about to get hit by a truck instead of telling you to just sit there because I think it might turn.

I can easily make the case that the two trade associations don’t focus on helping consumers, and I can now make a pretty darn good case that they aren’t helping their members either. So what are they doing with all of your money? Whose agenda are they pushing? Do you want to fund your own demise? You know that I am right. You hate that I am right, but you know that I am.

I feel that consumers and ironically legitimate debt settlement companies would be much better served if TASC and USOBA ceased to exist. They could actually serve a valuable purpose if they were honest about the real problems in the industry and took proactive action to help correct them. So far however, from what I can tell, they are betting on a loser by sticking to this ridiculous front loaded fee model is beneficial to consumers argument and are committed to riding it all the way back to the barn, regardless of the harm caused to their members.

TASC and USOBA members can ignore my advice at their own peril, but mark my words, if you give these two trade organizations enough rope, they appear to be perfectly willing to hang you with it.

Freedom debt relief says upfront fees help consumers-I say Bullshit-What say you?

Damon Day — Wed, 14 Jul 2010 21:45:18 +0000

If you have been remotely following the debt settlement industry these past few months, you undoubtedly know that some serious regulation is coming its way. From my point of view it is actually quite entertaining to watch most of these scammer companies scatter like cockroaches as the regulatory light starts to peek into the dark corners of their world. However a few brave (pronounced “foolish”) companies are actually trying to defend their blatant rip off, front loaded fee debt settlement programs.

One such company that caught my eye, simply because they are spouting off in press releases and news articles lately, is Freedom Debt Relief. I have noticed, that they are trying to advance an argument that by front loading their fees (charging all of their fees in the beginning half of their program), consumers will benefit by better settlements down the road. Huh? Oh, the premise of this one should be good.

A few weeks ago, debt settlement companies were all hot and bothered about how many jobs will be lost if the advance fee ban was passed. Well that didn’t work, so now they have a new theory.

It appears their new theory is that if they didn’t charge consumers all of their fees upfront then creditors will play hardball and offer consumers settlements that are much worse than they would offer if the debt settlement company was paid first. So in order to protect consumers, it is vital for debt settlement companies to charge all of their fees before preforming the actual service. If the debt settlement company is not paid first, it will create a power shift and the creditors will squeeze debt settlement companies and offer higher settlements knowing the settlement company won’t get paid until they accept an offer. So you see, they are just trying to look out for consumers here. This has nothing to do with their own self interests I guess.

Hmm, that sounds plausible, but there is just one flaw in their argument. It is total Bullshit! Freedom Debt Relief and anyone else with an ounce of common sense knows it is bullshit, but what are they supposed to say? Yes, we have been ripping people off for many years and we now admit that there is no reason to charge consumers all of this money upfront, other than, we know most of them will drop out and we want to bilk them for every last dollar we can before they realize we are screwing them. I haven’t seen a press release from TASC, USOBA or any front loaded fee debt settlement company admitting that yet.

They are “all in” now, they have no choice but to fabricate some sort of B.S. pro consumer argument. They know it will not fly with the regulators. They have to know. I don’t think they even believe their own B.S. any more. At this point it isn’t about keeping the law from passing, it is about trying to cover their butts and save face, so they don’t have to admit that they have known from the beginning that what they were doing was very damaging to consumers, and hurting a lot more people than they helped.

Sorry. Not good enough for me. Companies like Freedom Debt Relief have been charging these B.S. fees and not producing promised results for the majority of their clients for years according to the GAO and regulators currently looking into the industry. To add insult to injury, they are continuing to enroll people into these programs even after they have been caught with their hands in the cookie jar. The reality is that these companies simply have a flawed (Ponzi ish) business model, and rather than correcting the model, they would prefer to continue to put consumers at risk to protect their river of ill gotten gains.

I warned companies a few weeks ago that I wasn’t going to keep reading these press releases that they have been putting out in an attempt to confuse, mislead and take advantage of consumers looking for legitimate help, without calling them out on their Bullshit. So here I am calling you out on your Bullshit. If someone from Freedom Debt Relief or any other debt settlement program that front loads their fees, wants to leave a comment and explain to consumers how front loading all of your fees and putting the consumer at further risk of being sued by their creditors is actually in the consumers’ best interest, then by all means the door is open.

Until such time though, my recommendation to all consumers, is to not even consider hiring a settlement company that has a front loaded fee structure.

A word of warning to consumers. Some unscrupulous sales people will claim they don’t have any upfront fees. To be clear, when I say “front loaded” I am talking about the fact that they charge you most or all of their fees over the first half of their program. So you are paying most or all of your fees before most of the work (settlements) are done. They will roll these fees into your first 18 or 24 months of payments and claim it isn’t upfront. That is B.S., so don’t fall for it. If their fee is not spread out evenly over the entire program, and/or specifically based on the savings that they will achieve for you, then it is front loaded and it is not in your best interest to hire that company, regardless of what the sales person claims.