I was watching TV last Friday and a commercial from Credit Answers comes on and asks me “if I know if I qualify for the credit card bailout program.” Well I am usually pretty much up to speed on the programs available to help consumers in debt, but I certainly haven’t heard of a credit card bailout program.
Of course, there is no such thing as a credit card bailout program. In my opinion, Credit Answers is just running a misleading ad, designed to give the impression that they are offering some sort of federal program to get consumers out of debt.
The ad goes on to tell me that if my credit card debt is out of control, then they have powerful information I need to know about the new credit card reform act. Well there is legislation that goes by the name “credit card reform act”, and many consumers have heard of it. That little gift from the federal government was the reason that many prime borrowers had their interest rates raised and their credit limits cut prior to Feb of 2010 when the law went into effect. Thank you Uncle Sam for your foresight on that. However, I am not aware of anything in that legislation that would be powerful information specifically pertaining to debt settlement. Unless I am missing something, it looks like they simply name dropped it to confuse and mislead someone watching the ad.
Next I learn that I actually have the “Right” to settle my debts with my creditors. Really? I have the right to do this? Did TASC successfully lobby for a new amendment to the Constitution when I wasn’t looking? Is that one of the unalienable rights that I have been endowed by my creator with? Lets check the Declaration of Independence. I see Life, Liberty, and the Pursuit of Happiness. I don’t see Debt Settlement. Maybe there is some case law floating around that I am not aware of that requires creditors to settle my debt with me? Credit Answers, please explain to me where I go to learn about this new right to settle debt that I have?
Next the Ad assures me that I will be able to afford the monthly payments. Hmm, that is interesting because debt settlement doesn’t really have anything to do with monthly payments. Sure you might be making a monthly payment to a company like Credit Answers but your creditors will not be getting paid with them. In fact most of these affordable monthly payments will just be going to the hefty fees that Credit Answers will be charging you. After-all, they have to get the money to run all of these expensive commercials from somewhere.
The Credit Answers ad then tells me that the credit card companies have been given billions and they need to clean their books once and for all. Again, another reference to the government bailout. This sort of gives the impression that the banks have so much money, they are just sitting there all excited to write off bad debts and clean up their books.
They then implore me to call them to learn how to settle my debt in a “government bailout era.”
Now the commercial ends and I realize that I just lost 60 seconds of my life that I will never get back, but then something clicks in the back of my head and I am almost positive that Credit Answers is a member of TASC. No wait, that can’t be true. No TASC member would ever blatantly mislead consumers like this would they? No, certainly not after TASC issued a strong letter vowing to not tolerate this sort of behavior.
I even wrote an article back in March giving TASC an Atta Boy for calling awareness to these bogus practices. So out of curiosity, I go to the TASC website and sure enough, not only is Credit Answers a member of TASC, but they are actually an Accredited Member. Which means they are held to an even higher standard I would suppose. The kicker though is that Bill Loughborough, the founder and CEO of Credit Answers is on the freaking TASC board. WHAT!!!!!!!!!!!!!!!!! Hold on so I can put a shocked look on my face.
This is from the TASC website– Bill Loughborough is founder and CEO of Credit Answers LLC (CreditAnswers) a Texas based debt settlement company. Mr. Loughborough founded CreditAnswers in 2006. CreditAnswers recently became a TASC “Best Practices Accredited” organization and serves thousands of clients across the country and settles millions of dollars in debt each month.
Wow, they are Best Practices Accredited.” So this commercial is what TASC considers “Best Practices?” Sure, at least this ad doesn’t have a picture of the White House in it, but they have clearly used specific words and phrases to give the impression that this is somehow tied to the government bailouts. Is it really so hard to understand why organizations like TASC have zero credibility with real regulators? Here you have a member of TASC’s own board running an ad like this. At minimum shouldn’t the board members be leading by example? I mean, just a thought guys, when you are under this type of regulatory scrutiny and many regulators want to see the entire industry out of business, wouldn’t it be advisable to not run this sort of thing if you plan to stay in business? I really don’t get it.
So next I do a Google search for Credit Answers Commercial and I find that Steve Rhode over at How to Get Out of Debt, also saw this commercial and thought it was misleading as well. Steve wrote an article about it and posted the commercial on his site almost two months ago. Wait, I just saw it on Friday. This thing has been running for at least two months and TASC hasn’t told Credit Answers to take it down? Hmm.
At this point, I am officially taking back my Atta Boy that I gave TASC. They can certainly put out some convincing press releases, about how they will not tolerate this type of behavior. However, when members of their own board continue to do it with no consequences, at what point does TASC simply become a joke among consumers in the know?
UPDATE 6/8/10 TASC responds to my article.
Less than 12 hours after publishing my article I received an email response from TASC about the actions that they have taken against Credit Answers for running this misleading Ad. I recieved the following email from David Leuthold, the TASC Executive Director.
Mr. Day,
TASC would like to respond to your recent concerns about CreditAnswers. Please note that TASC shares your concern about the subject advertisements. It is our policy to provide our members with notice and a process to resolve potential concerns. By providing a transparent review procedure to our members, a notice procedure, and time for them to respond and correct potentially problematic ads, we believe that it builds better compliance among our members. The member at issue did receive such notice well-prior to your recent article and was provided time to correct TASC’s concerns. As of recent, the member was terminated. This can be confirmed by visiting the TASC website at tascsite.org.
David Leuthold, TASC Executive Director
After I received the letter, I checked the TASC website and sure enough, Credit Answers had been removed. They were still listed as a member the day before when I published the article.
I then sent a reply email to TASC asking if Bill Loughborough will remain on the TASC board now that his company has been kicked out. I received the following reply.
Hello Mr. Day
As Credit Answers is no longer a TASC member company, Bill will no longer serve in any capacity on the Board at Large. Bill served TASC well and faithfully for a good while. While we are sorry he will not be able to continue, we believe our standards are clear, as are our enforcement policies.
David Leuthold
I must admit that I am very incouraged by this action taken by TASC and I hope that this is a trend that will continue.
Now if I could just get TASC members to realize that their front loaded fee structures are hurting consumers and convince them to adopt a performance based fee structure as requirement for membership in TASC, we might really get somewhere and actually start providing real relief to the people that need it most.
Its not a surprise that a company trying to dupe consumers who werent smart enough to watch their own credit into another bad deal for themselves.
yes, unfortunately it happens all the time. Especially in the debt settlement industry where it is certainly more the rule than the exception. Consumers need to really be careful and not pay attention to advertising.
I think we have all been mislead by advertising and I have definitely eaten that burger (not the polished, artistic version!). It seems bizarre that in order to settle your debts, you first need to pay another company a monthly fee! Obviously you’re better saving this fee and paying off the debt direct.
At times it certainly can make sense to hire a settlement company and in other circumstances it makes more sense to settle the debt directly with your creditors yourself. However, I would never recommend hiring a company like Credit Answers who charges their fees before they perform the service.
Most people don’t realize that anything these credit repair companies can do, they can do for themselves. The really bad companies prey on ignorant, desperate people. I think the best thing anyone in debt can do is stay calm and get educated. For example, I was shocked to learn about the statute of limitations on debt. There’s a lot of information out there that some credit repair scammers don’t want consumers to know about.
Hello Ellis,
Thanks for taking the time to stop in and share your thoughts. Your suggestion to stay calm and get educated, is spot on.
I feel like it is criminal to be so misleading. The way people advertise so many things is “lying by omission”. Which then in turn leads to false advertisement.
Hello Jenna,
You are right on point, unfortunately the FTC can not keep up with everything and consumers really need to rely on good judgment and think about things that sound to good to be true.
The debt settlement industry is riddled with outright fraud in their advertising if you ask me.
Organizations like TASC are there to look after their members, not the general public. They lobby for legislation that benefits themselves and not the general public. They consider that they don’t need oversight because they run a tight ship and they’re looking after their industry, but in fact all they do is look after their members. The public are just sheep to be fleeced.
Hey Robert,
Couldn’t have said it better myself. Thanks for stopping by to share your thoughts.
I used to work for Credit Answers a few years back. I lasted about 5 months, which BTW is considered a long term employee. From day 1 we were trained to mislead consumers as to what can and cannot happen to them. They were very concerned with TASC and did have us word things very carefully as to not be in violation of TASC rules. TASC is a joke BTW. You mentioned that Bill Loughborough was on the board. Go look at the rest of the board. They are all CEO’s, directors, etc of debt settlement companies. If that isn’t a conflict of interest, I don’t know what is. If people are considering debt settlement as an option, they should do the negotiating themselves. Anyone who tells you that they can do it better are FLAT OUT LYING! If you can’t pay their minimum payment, they will send you to collections, and at some point they will negotiate.
Hello Jason,
Thank you for coming on to share your thoughts. Yes unfortunately the way Credit Answers operates is the way that a majority of debt settlement companies operate. It is all about closing the sale and making the money and nobody is actually doing what is in the best interest of the client looking for help.
You are right that TASC is a joke. I have been raising the alarm about them and USOBA for years. TASC is now in the middle of trying to re brand themselves as consumer advocates. It is an absolute joke, they are still an association of debt settlement companies, but now all of the sudden they are going to pretend to be consumer advocates so they can continue to let their marketing machine roll over unsuspecting consumers who are told that you can trust members of TASC.
Ok, I am off my soap box.
Jason, as someone who has worked in the industry I would love to get your thoughts on some of my other articles. I look forward to hearing from you again.
Re: The person who produced the remark that this was an excellent site genuinely needs to have their head inspected.
I disagree. I am pretty fond of the site myself 🙂