Debt settlements are under scrutiny by the federal government, with senate hearings including testimony from aggrieved customers.
See Good Morning America's coverage of the story here, which includes the senate commerce committee's report of the "6 Most Problematic Debt Settlement Companies"
A New Beginning Financial & Ministries
Credit Solutions of America
Freedom Fidelity Management
Procorp Debt Solutions
Web Credit Advisors
I thought I'd seen a national commerical for Credit Solutions of America recently, but I can't find it now.
Coming soon; a ban on advance fees for debt settlement services, and probably more regulation designed to make offering debt settlement services less profitable.
I've been on the record that settlements can be a good option for some consumers, provided they understand completely what they're getting into. A responsible settlement agency makes sure its customers understand all of the pros and cons of a settlement so they can make an informed decision. All it takes is a handful of agencies making false or misleading claims, and now an entire industry is under fire with crushing government regulations looming. We saw that with credit counseling a few years ago, and now it's settlements' turn.
The other issue is indiscriminately enrolling every client who calls; whether you're a bankruptcy attorney, settlement negotiator, or a credit counselor, you need to figure out which clients truly need your service and target them. It does you no good to sign up a client who isn't right for your service and is destined to fail. In this case, a client who didn't complete their settlement and lost thousands of dollars got to tell her story to a senate committee, and now hundreds of settlement agencies will pay the price. Who enrolled her in a settlement plan? If I were in the settlement industry, I'd be furious at the agencies who invited this legal scrutiny.
I'd only wish congressional hearings and federal legislation on my worst enemy. Having said that, junk debt buyers should be next up for investigation.