Today TASC issued a statement claiming that Illinois Attorney General Lisa Madigan’s proposed Bill HB 4781 would hurt consumers. I agree that there might be a little validity to that statement in a sense that regulating specific fees on what companies can charge can be a very slippery slope and many times will not solve the problem it was intended to solve.
However, I believe that Madigan and other AG’s proposing similar legislation are doing what they feel is best to protect the consumers in their states. There is no doubt that the debt settlement industry is fraught with crooks, scammers, con men, and profiteers.
The problem is that these Attorney Generals are very hard pressed to find reliable sources for real, honest information about what really goes on in the debt settlement industry and the best way to go about helping and protecting consumers.
TASC claims that there are a few bad apples in their industry. What a complete joke. I say there are only a few good apples and the rest of them are just rotting on the ground waiting for another hapless consumer to take a big bite.
In my opinion, TASC has zero credibility when it comes to their opinion on what is good for consumers. TASC has completely missed the boat and unfortunately wasted a perfectly good opportunity to be a driving force for good in the debt settlement industry. Frankly I don’t know how TASC members can actually testify with a straight face that what they do is beneficial for consumers.
Instead of looking out for the consumer’s best interests and holding their members to certain standards that would actually help, they chose to simply continue to endorse front loaded fee structures that by enlarge, harm, many more consumers than they help. I have never seen any evidence to contradict my opinion on this.
These front loaded fee structures encourage commissioned debt settlement sales people to sell or convince anyone that can make a monthly payment to sign up into their program. Therefore, there is no incentive to actually screen clients properly to determine if a settlement approach is even a good option. Sales people are simply trained to sell, sell, sell. Even if a consumer drops out of a program after a few months, the settlement company and the sales person still earns a substantial amount of money.
This front loaded fee structure is very harmful to consumers and creditors alike. So why does TASC not only allow their members to do this, but actually promotes and defends the practice? The only logical explanation that I can think of is that TASC does not care about helping consumers, at least not as much as they care about helping themselves. Obviously this is just my humble opinion, but I think TASC’s actions speak loudly in corroboration of this point.
Their board is made up of debt settlement companies, that for the most part, use this type of fee structure, and they had no incentive to ban the practice that was making them so much money. Consumers be dammed. Since they haven’t done their job, now there is really nothing they can do but bitch and moan about the regulators who are stepping up to do things that TASC has pretended to do all along. If TASC isn’t happy with what is happening, then perhaps they should fire both boards and replace them with people that will actually stand up for consumers.
What I would love to see, is a logical and coherent argument from TASC, explaining how and why these front loaded fee structures are financially beneficial to both the creditors and consumers. I know why they are financially beneficial to debt settlement companies, but I just can’t figure out how the two parties that debt settlement is supposed to help, (debtor and creditor) benefit from this practice that is promoted by most companies in the industry.
I have already seen the lame attempts by settlement companies to justify their front loaded fee structures when they submitted their commentary to the FTC. After reading that stuff, I am not surprised by all the recent regulatory activity to try to put these guys out of business. Unfortunately, with increased regulation comes increased costs on business, and in the angst to put these bad operators out of business, I hope the few good ones out there will not be severely hindered in their efforts to help consumers. Depending on the final legislation, there is a chance that consumers will be harmed as well.
If TASC would have actually done the job of looking out for consumers in a meaningful way, then perhaps AG’s across the country like Madigan, would have not felt that they had a need to intervene to protect consumers. So TASC, it may turn out that certain legislation could be harmful to consumers, and it will for sure be harmful to your member’s bottom lines, however the regulatory action is simply a reaction to your inaction and therefore you have nobody to blame but yourselves.
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I really enjoyed your post. But it really makes me wonder why the pictures aren’t suitable with the information in your article. I mean what is the connection. I’m sorry if my question is not appropriate.
Hello Donovan,
I am glad you liked the post. Well I guess you have to understand my humor to know how the picture connects to the article, at least in my head 🙂
I look at it like the father is likely driving the boat, the mom bails off the back because the dad is driving to fast and the kids are scared out of their minds and fending for themselves.
Think of TASC as the parents and consumers as the kids in the photo.