Will it benefit Americans if the FTC put an end to debt reduction?
by diywealth on Nov.10, 2009, under diy
The Fall of the Credit Card Debt Negotiation Industry: FTC to vote on fresh legislation.
An entire industry shouldn’t suffer for the scumbag tactics used by only a hand full of services. The regulators have recently put forth new restrictions involving the credit card debt relief sector that will prove to be critical in the demise of the industry if enacted. A vote will occur in November 2009 with the issue of enacting legislation that will aide consumers trying to get debt relief. But can it honestly come to benefit of consumers to pretty much eliminate the method of hiring a business to settle bills for you?
The principal trade organizations representing debt negotiation/settlement companies have put money into research studies to establish the success and overall results of the debt relief branch. Both TASC (The Association of settlement companies) and USOBA (United States Organization for Bankruptcy Alternatives) have high hopes to bring light to the true benefits of debt settlement to the government and to not allow the passing of such crushing restrictions.
Debt settlement companies work on customers’ behalf to settle down unsecured accounts, such as credit card debt, unsecured personal loans, lines of credit and hospital bills. They aide a class of Americans with difficult hardships, such as health illnesses, job loss, divorce, or death of a family member.
Most of the restrictions that the FTC is seeking to put into action—encompassing a restriction of upfront charges— would essentially crush this viable program for Americans who are feeling difficulty with unsecured debt. TASC outlined in a brief historical performance data the economic value its member companies give to Americans enrolled in debt settlement programs, and it is clearly illustrated. For example, based on a current data research of its members, TASC can prove its members negotiated more than 94,000 bills totaling more than $553 million in debt in the first 6 months of 2009. This is an annual projected amount of more than $1.1 billion in unsecred debt settled by TASC members for just this year. A multitude of other research projects also clearly indicate the advantage of the debt settlement sector as a whole, showing the positive impact made on the consumers in general.
USOBA has supported research projects of the debt settlement industry by Dr. Richard A. Briesch, an Assistant Professor of Marketing at Southern Methodist University’s renowned Cox School of Business, releasing the study named “Economic Factors and the Debt Management Industry” earlier this month. He looked over a single objective assessment of the advantage to US debtors, if there is one, put forth by debt settlement companies. In going over detailed areas of doubt in the debt settlement industry, like client finish rate of debt settlement programs, up-front charges, the quality of settlement officers, and general consumer benefit, Dr. Briesch finished that debt negotiation can provide immense value and benefit to people even more so than what consumer credit counseling can offer.
Commissioner J. Thomas Rosch of the FTC also has mentioned that the Debt Settlement industry has an imperative part to play as he said “For example, a debt settlement company can speak on the customer’s behalf, especially in predicaments where debtors are frightened , uncomfortable, or even afraid to phone their creditors directly. A debt settlement service also may be able to give personalized attention to consumers, adopting a wholesome approach to all of the consumer’s unsecured debt owed to a multitude of creditors, as opposed to just the sum owed to an individual creditor. Running the complete debt portfolio and putting attention on restoring the consumer’s economic health has always been a critical value proposition of debt settlement negotiators.” Rosch moves further to speak about several recommendations to the industry that can help to reduce the issues by consumers, seeing that it’s the complaints that push forward the Federal Trade Commission and other government bodies like the AG’s offices, Legal Bar Associations, and the Better Business Bureau to scrutinize, report, and crack down on the companies working in the industry.
The The Federal Trade Commission does not have to set restrictions in place to aide taxpayers because there are multitudes of sources to research when finding a reputable company to aide you in debt freedom. Also, understand that a service that is a partner of either TASC or USOBA would be a safer bet because these organizations were begun to shield people and to make sure that their member services are working to a higher level.
Visibly, some companies use differing plans and fee structures that will suit different debtors based on their specific needs, but after the correct research is conducted, the possibility of signing up with a scammer agency is drastically reduced, if not completely eliminated. Debt settlement has shown to be a program that assists people; it would be a disservice to debtors to all out terminate the industry by implementing over the top regulations.
