Advance Fee Ban Will Reshape the Debt Relief Industry

CRN Supports Changes to the Telemarketing Rule Just Announced by the FTC

Yesterday, the FTC announced important changes to the Telemarketing Sales Rule, http://www.ftc.gov/opa/2010/07/tsr.shtm. The changes are intended to protect consumers with too much credit card debt from abusive debt settlement practices. One of the most important changes is that settlement firms will no longer be able to charge consumers up-front fees to settle their debts as of 10/27/10.

Overall, I am thrilled that the FTC is reigning in abusive debt settlement firms. For too long, these firms have been allowed to prey on consumers with too much credit card debt. Sadly, in far too many instances, consumers who worked with such firms saw their financial situations grow worse, not better, because of the large up-front fees they had to pay, and many of those consumers eventually ended up in bankruptcy.

The rules will shape the industry and promote the best practices moving forward.

I am concerned that some settlement firms may charge a large fee at the back end of their work for consumers. I have always contended that the fee amount charged by a debt settlement service provider directly correlates to how long it will take an individual to be successful in settling all of their debts. Program duration is directly attributable to increased risk of aggressive collection efforts such as filing lawsuits against a consumer in order to collect.

When consumers are looking into debt settlement as one of the few legitimate options available to deal with crushing debt, it is IMPERATIVE that they still weigh the COST for the service.

I will be posting more detailed comments about the amendments soon. Stay tuned!

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New Rules For Debt Settlement Services

The Debt Relief Industry will be forever changed by the announcement and publishing of new rules from the FTC today. The rules are designed to protect consumers from those marketing and providing debt settlement services.

The most contested  measure anticipated in the new rules is a ban on companies charging upfront fees. Upfront fees have been held up as necessary by the majority of debt settlement companies who have lobbied heavily to maintain the status quo. Consumer advocates and regulators have argued that upfront fees are the equivalent of an abusive business practice. We, at CRN and Debt Bytes, agree! Which is why CRN fees for full service debt settlement have always been based on SUCCESS, after the creditor is paid.

Stay tuned to Debt Bytes, as we will be covering the impacts of these changes in the coming weeks.

For Immediate Release

July 28, 2010
**MEDIA ADVISORY FOR TOMORROW**

FTC Chairman to Announce a New Debt Relief Rule to Protect Financially Distressed Consumers at Middle Class Task Force Event

WASHINGTON – Tomorrow, Thursday, July 29th, at 1:30 PM ET, Federal Trade Commission Chairman Jon Leibowitz will announce a new rule to protect consumers of debt relief services at a Middle Class Task Force event at the White House. Following the Chairman’s announcement, Vice President Biden will discuss the administration’s consumer protection agenda and the importance of consumer protection to middle-class families.

This event will be POOLED for TV cameras, and OPEN to print, online, radio and still photographers. An RSVP is required to participate.

WHAT: FTC Chairman to Announce a New Debt Relief Rule to Protect Financially Distressed Consumers at Middle Class Task Force Event

WHO: Vice President Joe Biden, Federal Trade Commission Chairman Jon Leibowitz

WHEN: Thursday, July 29, 2010, 1:30 PM ET

  • Gather time: 1:00 PM ET at the White House stakeout location
  • Camera pre-set: 12:30 PM ET

WHERE: Eisenhower Executive Office Building, Room 430

RSVP: Press who wish to cover this event should RSVP to press@ovp.eop.gov by tomorrow, Thursday, July 29, 2010 at 8:00 AM ET. **Press who DO NOT have a White House hard pass should include their Date of Birth and Social Security Number. All press must enter the White House at the Northwest Gate.**

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Consumer Rights and Debt Collectors

You have the right to life, liberty and the pursuit of happiness.

When struggling to manage your debt, however, it often seems as though those rights have been suspended!

The struggle to pay bills can make you feel as though you don’t have a life. If it seems as though all you are doing is working to pay the bills and getting nowhere, you could feel imprisoned. If you are buried under a mountain of debt, a sense of gloom will sometimes permeate your thoughts. That sense of gloom can turn into DOOM if you have fallen behind in payments.

Enter the Debt Collector

{cue scary suspense theme music here}

Dealing with tough financial times is hard enough as it is. When debt collectors start ringing your phone at 8 am and do not stop until 9 pm, your phone begins to resemble something with scales and sharp teeth!

When you pick up the phone and speak to whoever is on the other end, you will experience different types of collection efforts. People in the collection business often develop either a good cop or a bad cop persona.

Speaking to and repeating your current financial hardship to a good cop collector can be tedious, but otherwise not unpleasant. Speaking to a bad cop collector can be about as pleasant as running your nails over a chalk board repeatedly.

We’ve Got You Covered

We will continue to develop our coverage of this topic and add resources for dealing effectively with collection abuse. Debt Bytes will publish a resource guide for victims of abusive and illegal collection tactics that will be linked to this post and all future posts on this topic. Here at Debt Bytes, we will cover debt collection extensively:

  • You need to know how to be a winner in the collection game.
  • You need to know you have rights that protect you from abusive and illegal collection practices.
  • You need to know there are solid resources available to you for legal assistance if a collector violates the Fair Debt Collection Practices Act (pdf doc).

Debt Collection Questions?

For now, you can:

  1. Post your question right here in the comment section below.
  2. Start a new post with your question at Ask CRN.
  3. Fill out our consultation request form to schedule a time to speak with an experienced CRN Debt Specialist.
  4. Or call 800-939-8657 and press ext. 3 to schedule a consult.

CRN specialists have many years of experience assisting people with putting an end to their struggles with debt. Contact us to find out if we can help you.

Debt Happens. Freedom from debt happens too!

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Get the Truth From a Debt Settlement Company – Ask These Questions

We launched our newly redesigned website and this brand-spankin-new Debt Bytes debt settlement blog this week! We have plenty of tweaks to make still, but things are shaping up.

I was editing the frequently asked debt settlement questions page today over at CRN (long overdue) and needed a break. I called a friend of mine who is quite knowledgeable and active with all things consumer debt and asked him for suggested additions (I hope to get him over to debtbytes for some guest posts in the future).

He emailed a brief list. I may later put some of these up on the CRN F-A-Q, but for now I needed another break from updating the new CRN site. Writing and editing site content knowing it is more focused on corporate image and branding can be a bit tedious. The debt bytes blog is where we at CRN can let our hair down a little.

Anyway, here is the list of additional questions he sent me and my responses below each:

  • Do I have to sign an agreement to use your debt negotiation services?
  • Can I see it without giving up personal information?

All CRN members must complete and submit a Membership Enrollment Form prior to purchasing even our basic educational materials. Why? There is some pretty powerful stuff in there about getting out of debt, improving your attitude about money, planning for your financial future etc… Not everyone is ready for this stuff! There is just a little bit too much “truthiness” to it all. Someone could get hurt!

You can definitely see the agreement prior to speaking with us by downloading it from our web site: Debt Settlement Truthiness Purchase Form

What are your debt settlement fees?

CRN Full Service Settlement Fees are currently 15% of what we save you – AFTER we save it. There are costs for our materials. We refer to this cost as membership fees. Membership fees are fully credited against any future success based settlement fees as an offset. Rather fair, if I may be so bold…

You even have a limited and life time refund policy! Check out the Truthiness Form for all the details!

How do I know you are a legitimate debt settlement company?

How to check out and compare debt settlement and debt relief companies:

  1. Length of time in business.
  2. You have many mainstream media articles and radio interviews about us which you can find links to by doing a web search, or by clicking media logos on the site pages.
  3. Regulatory participation encouraging measures be taken to curb abuse in the debt settlement industry.
  4. There is no shortage of members who have shared their experience working with us by writing to CRN. The CRN site has many customer quotes alternating throughout the pages.
  5. We are also starting a new way for people to share their experience with us by having a testimony blog post here at debt bytes. This is where people can share openly and unedited (unless they use harsh profanity). How do you know those quotes are real? If we faked it and got caught it would be false and misleading advertising. We have a record of all. What if I am just saying this to get one over on unsuspecting consumers? Well, I just admitted to knowing it would be false and misleading to do so. That would be like…. fraud or something.
  6. You have the BBB.
  7. Also, Google (not to leave out all the other fine search engines out there – but I did) the name of any company you want to research, add a plus sign (no spaces), then add review. Like this: Consumer Recovery Network+Review

I am sure there are more ways to complete your due diligence. You could call my mom, for example.

How do I know I can trust you to deliver on the debt negotiation service you outline?

This is a HUGE question! This is especially important given the track record of many companies offering debt settlement and the massive amount of negative media coverage surrounding the industry. The CRN business model is designed to build your confidence in us as well as the product & service we support – from day one. We will earn your trust.

Why should I listen to you? Aren’t you just trying to sell me something?

You should listen to what our specialists have to say when we do a consultation with you because you could avoid making a huge mistake! One of which might be trying debt settlement on to see if it fits – this would include working with us!

We do have a product for sale. We do have services you pay for AFTER you see and like the results. We DO NOT have sales people!

Our Specialists you consult with can often be found discouraging you from going down a path that would involve working with us – thereby paying us anything. I personally deter more people from trying to avoid bankruptcy through debt settlement than I encourage into it.

That’s a free service by the way, those consults. If you feel the consult was of value and are thankful, please consider donating a bag of non perishable food items to your local food bank in return. We know times are tough for you, but there are those for whom times are even tougher.

For those of you reading this post that have already talked to a debt settlement company (or you call one later); call them back and pose these questions. They may not have as much fun answering them as I have. I am of course answering those debt settlement questions above with a bit of irreverence, but it is easy to do that when CRN has been such a different debt relief company and resource than virtually any other in the nation. Besides, if your not having fun… you’re doing it wrong!

If you have a question for us, you can click on Ask Michael (and get mostly serious answers too). And, as always, your comments are welcomed below! Break’s over. Back to work for me.

Edit: Merriam-Webster
truthiness (noun) – 1 : “truth that comes from the gut, not books” (Stephen Colbert, Comedy Central’s “The Colbert Report,” October 2005)

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Debt Relief Program Reviews

Many people we work with write in to express their gratitude for the assistance we provided in helping them get out of debt through our debt relief program. We decided to create a way for people to share their experiences with others by posting their review to the site.

In 2012 we started a publishing project to share informative and tutorial based debt relief education. A great deal of the debt relief program publishing is focused on helping you understand your options to manage debt, especially when you are looking for outside help. Because settling credit card debt is the most flexible option, while being the least understood, the larger portion of the debt relief program education is dedicated to debt settlement.

Share your story, feedback, or review as a CRN member, or as debt relief program reader.

There are no rules for posting. You may want to follow an outline of what brought you to CRN, how we compared to other options, websites, or companies you looked into. It would be great for others who may read your comment to know what you were/are dealing with, and what the ultimate result of working with CRN, or learning with us, has been.

Or, just have fun and express yourself!

Not everyone we consult with qualifies to follow our more aggressive approach to dealing with debt. Many of you we consult with still appreciate the time we take to inform you of what debt settlement really involves after having contacted other service providers, or having visited websites light on the details.

Even those looking for one on one assistance and guidance from CRN may not be recommended for membership. Our consults are often a refreshing dose of blunt honesty for people just looking for information and answers they can trust. You are invited to share too!

Tell you what…. If you having anything to share about CRN, or the debt relief program…. chime in! We look forward to hearing from you!

P.S. You can identify yourself using your initials or first name only, unless you are comfortable sharing your identity, like Jonathan Grossman, who blogs about his debt relief program experience working with CRN at: Debtsettlementstory.com

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