We have now established that TASC is first and foremost a trade organization for the Debt Settlement industry and its number one goal is the protection of its own TASC Debt Settlement member companies. In this article we will examine whether or not TASC can protect consumers at the same time it is busy lobbying to protect its members.
I believe the answer to this question is that Yes, they can protect consumers, however, they fail miserably. TASC claims to protect consumers, but a cursory look at the organization and how it operates makes it clear, at least in my opinion, the consumer protection claim is simply window dressing to benefit their own self serving interests.
TASC Debt Settlement Companies Face an Ugly Truth
I know I am certainly going to ruffle some industry feathers with that one. However, as I stated, that is simply my opinion, may the facts speak for themselves.
FACT: TASC is an association of settlement companies.
FACT: What is best for the member company profits is not always best for consumers.
FACT: Each TASC member company pays TASC $500 to $10,000 a month in membership dues.
FACT: Consumers do not pay monthly dues to TASC.
FACT: TASC provides suggested guidelines for companies to follow, but doesn’t hold them to it.
FACT: TASC’s suggested guidelines allow member companies to charge up to 20% of a consumers total debt as a fee.
FACT: TASC’s suggested guidelines allow for a settlement program to stretch out for 4 years.
FACT: TASC allows companies to collect all of their fees before the clients debts are settled.
FACT: TASC does not set a minimum client success rate standard.
FACT: TASC does not require member companies to charge a fee based on performance.
Now I am sure a lot of industry types are going to get all huffy and point to all the wonderful things that TASC does to help consumers. That is smoke and mirrors. I am not saying that TASC doesn’t do anything to help consumers. What I am saying is that they do far less than consumers are led to believe that they do, and there in lies the rub. In my opinion TASC is guilty of false and deceptive advertising. Yes, the very same thing they claim to prevent settlement companies from doing, they are guilty of themselves.
TASC member companies are agents of TASC, so if they are making claims about TASC that are false or MISLEADING, then TASC is also guilty because the agent is representative of the principle and it is TASC’s job to ensure that they are accurately being represented. So I will say it again. I am not attacking TASC for doing nothing to help consumers.
I am calling TASC to task if you will, by claiming agents of TASC routinely give false and misleading representations to consumers of what TASC actually is and what it does. Further, TASC is in the business of helping TASC members and only providing consumer protection to the extent that it benefits the interests of TASC members.
How do I know this? Because I talk to consumers every day that have been told that TASC is a great consumer watch dog. TASC certainly has the potential to be a watch dog and protector of the consumer, but currently, it provides what I consider fluff to give the appearance that they are protecting consumers.
Check Out The Deal TASC Has For You
Attention consumers, lets play what would you do. I am a contractor. I come over to give you an estimate to build you a new house. The house is going to cost 1 million dollars. I tell you that my general contractor fee is $150,000. 15% of the total cost. Now, this is a big lovely house and it is going to take me 4 years to build it from start to finish. However I want to collect my entire fee in the first 18 months. I will conveniently break that up into monthly payments of $8,333. What do you think? Do we have a deal?
According to TASC, this fee structure is perfectly acceptable. What? Wait a minute, 18 months into a 48 month job, I will be lucky to have the house framed by then. I am not going to pay the entire fee before I can approve the work. What if the contractor goes out of business? What if they do a terrible job? Ah, now we have come to the problem.
How can TASC claim that they are pro consumer, yet be ok with their members charging consumers in this way? As a consumer, what is my assurance that I will be taken care of in the last 30 months of this 48 month program if I already paid all of my fees? I don’t know, maybe you should ask TASC that question. I can’t explain it.
Oh wait, I can explain it if we understand that TASC is there to protect the best interests of its dues paying members, not the consumer. I can clearly see why this fee structure is great for the debt settlement company, yet for some reason, nobody has been able to explain to me how this fee structure benefits the consumer.
Fun Fact: The President of TASC is also the President of Debt Settlement America as I told you in my last article. I am told that this is the fee model that Debt Settlement America uses. Consumers that have spoken to their “Executive Certified Financial Consultants” (ya that really is what they call their sales reps), tell me they charge 15% of your debt as a fee, all within the first 18 months. Even if they put you on a program that will last 48 months. By the way, not paying your creditors for 4 years, will give you a great chance of visiting the inside of a courtroom. But that is a different issue.
Wait a minute, don’t the “suggested guidelines” provided by TASC suggest that member companies spread out the fees over at least half of the program? Ya they do. So if it was a 48 month program, the TASC guidelines suggest the fees get spread out over at least 24 months.
Wait, wait, wait. Are you telling me that TASC’s own executive board President doesn’t even follow his own recommended guidelines? I guess. I don’t know. I haven’t seen their contracts nor have I ever spoken to their “Executive Certified Financial Consultants” (I love that) so I cannot confirm that. I have been told by multiple consumers that they were told that the fees are spread out over the first 18 months regardless if the program length is 36 or 48 months.
However, that being said, whether they spread the fee out 18 months or 24 months, the consumer is still required to pay all the fees with two years or more left in the plan. I am not able to reconcile how that is beneficial to the consumer. I haven’t even discussed the fact that this fee structure requires creditors to wait even longer to get paid.
TASC – Put Up or Shut Up
If TASC Debt Settlement Companies really wanted to step up to the plate and protect consumers than I challenge them to prove it. Put their money where their mouths are and actually do something that would protect consumers. Here are some suggestions they should consider.
1. Don’t allow Telemarketers to give financial advice. Require, someone that is advising a consumer about their best financial options to actually have some financial education and be qualified to give the advice. (Ouch, there goes the boiler room)
2. Limit the number of clients that your member companies service to insure that they each get the one on one attention that they need and deserve.
3. Require that all companies charge a fee based on their performance to their clients, not the clients total debt.
4. Require that clients are presented with all options available for getting out of debt. Even if that means not selling a client a debt settlement program if they would be better off filing Bankruptcy.
5. Every year, you will evaluate each member company for success rates. If the success (completion) rates are too low, you will revoke that member company’s membership.
6. Set realistic standards to prevent companies from enrolling consumers that are very unlikely to be successful. (Ties into completion/success rates)
Would TASC really implement these suggestions? I don’t know. If they were really serious about protecting consumers I think they should seriously consider them, don’t you? However, these suggestions would certainly affect the TASC member company’s bottom lines and cause them to lose memberships. So all we can do is look at their actions and draw our own conclusions. TASC Debt Settlement Lobby, Protector of the People, or both? What do you think?
And now, things that make you go hmmmm. Why is it that almost every consumer researching Debt Settlement is aware of TASC, thinks it is a good thing, but not 1 in 100 actually knows what TASC is and what it does? We will find out in the next article. Stay Tuned…
This article was the 3rd, in a series of articles taking a closer look at The Association of Settlement Companies (TASC). The series currently consists of the following:
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