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You know fear is there. Every call you make to a debt troubled borrower is dripping with it. They don’t answer the phone because they think you are a collector. They reject your offer of help because it feels like another scam. They resist your advice because Uncle Harry said something different.

All the while, they are being crushed by stress and their problem is getting worse. The best way to break through this barrier to service is to understand the fear. Here are five of the biggest fears I observe in debt customers.

1. Knowing Less Than You - These people are not good with money. And generally that has everything to do with a lack of knowledge. They don’t know how debt works, they are ignorant of the basic principles of financial management, they lack the understanding to evaluate various money options.

The worse part is they know it. They know they are not equipped to handle these decisions. They know that they know less than you and that puts them on the defensive. They have probably already been taken a time or two by scammers (knowing more than they did) that offered to "help."

2. Are You Real? - They’re afraid of what you are, or worse what you might not be. They know that websites can obscure real size and stability. They may even have been taken by the perception of Web legitimacy on their way to their debt problems. 

They are fearful of companies they think are Web only. Companies that don’t have addresses, telephone numbers, and people to talk to when things go wrong.

3. Are You Qualified? - Troubled borrowers’ telephones are constantly ringing with people who want money. Most are reminders of past bad financial decisions. How are you different? What makes you qualified to show them out of their hopelessness? This is going to be a big barrier. This is perhaps the most fundamental step of trust you are going to have to take with any debt lead.

4. Do You Care? - No one else has, why would you? Debt customers are constantly beat on by collectors and preyed on by scam artist. You are running straight into a phone conversation with someone that doesn’t trust anyone talking about money. Big barrier to solving a debt problem, huh?

5. Are You a Scam? - You can assume this is the first assumption on every debt customers’ mind when you make that call on the debt lead. 

Bottom line: Are you a stable and reliable business?

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Debt customers can be some of the toughest to convert. These prospective customers are scared, lack a sense of hope, and many are working against the clock for the best solution. The longer they wait to solve their debt issues the worse the problem gets and the less options they have.

We know that, but how do you convince Internet debt relief customers?

1. Steady Their Fears - This is the number one barrier to getting that debt lead to convert. These folks are terrified of all things credit. You need to quickly steady their nerves and convince them you have their best interests at heart.

Be consistent and always follow-through on promises. Show them that you are there to help, not just collect fees.

2. Listen to Their Story - This is probably your #1 conversion tool. Folks with debt problems always have a story that needs to be told. This process builds trust and gives you important insight into how they got into trouble and how you can help them get out of it.

Debt customers are not used to being treated with respect. Do it and you will instantly gain a client.

3. Educate Them on Debt Relief - This goes hand in hand with reducing debt customers fears and building trust. Make them the smartest debt consolidation or settlement customer you can. Tell them (in plain, simple language) everything you know about debt relief.

They will be grateful and confident. This approach, especially when they compare it with other research, will again build up your credibility and their trust in choosing you for a debt solution.

4. Build Trust in Your Company - Some debt customers need more than confidence in you. With debt and loan modification fraud running rampant, they want to know you work for a reputable company.

Make sure that you can point to a professional website, credentials, and testimonials that validate you.

5. Make Sure They Understand - At the end of the day, the fastest way to get a debt lead to convert is to get the customer comfortable with the deal.

The faster they understand, the faster they gain confidence, the faster they close.

Whether you are in the mortgage or the debt settlement business–loan modification leads are a good bet for prospects. If you think about it loan modification implies a crushing debt problem. Assuming that a homeowner is holding one of the largest debt burdens an average customer will encounter, a loan modification lead is someone in real debt relief need.

Why Loan Modification Leads?

If you are in the debt settlement business you may be wondering why I would recommend loan modification leads. The answer has a lot to do with detecting the intent of the person inquiring and how close they may be to taking action.

As you know most debt leads are people very early in knowing (or admitting) they have a debt problem. That means you are spending much of your time convincing them that they need to take care of their debt problems now.

To the contrary, someone who has inquired about a loan modification knows they have a crisis on their hands. They also are probably a bit more sophisticated, in that (believe it or not) most consumers still don’t know what about loan modifications.

Opportunity to Set-up Mortgage Referrals

It is also a fair bet that if someone is having problems paying their mortgage they are there because of credit problems, credit card debt, installment loans and the like. Sounds like the perfect person for you, in the debt settlement business, to help.

Ultimately, getting them into a stronger financial situation to support that mortgage payment.

However, you might not have the expertise or licensing in your debt settlement practice to solve the mortgage issue. Never fear, this is a perfect opportunity to set up a referral relationship with a mortgage broker or loan modification specialist.

Ideally, these loan modification leads will not only get you some more debt settlement deals, but they may also get you some referrals flowing from mortgage partners.
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It seems like there was a lot of talk of the government helping consumers out of their debt problems. The premise was that this would jump start the teetering economy. Did it happen?

I’m kinda asking the question out loud and hoping for your input. I am not really seeing it.

Loan Modifications

It seems that President Obama is having to twist the loan servicers’ arms into executing on the loan modification plan that doled out $75 billion in tax payer money. Meanwhile, foreclosures are starting to accelerate again and the home values are still deeply depressed.

It seems like the government actions have had plenty of time deliver an impact. Yet, I am not seeing it. What about you? Are your clients getting relief?

Government Regulation on Debt Relief

To the contrary, it seems like in an effort to clean up the debt and mortgage industry they are choking off potential help to consumers. I am certainly a loud advocate for ethical standards in lending and debt relief, but could stiffer regulatory action be hurting?

Again, I am not on the street working out consumers’ debt problems or modifying mortgages so it is hard to register an opinion.

Government Help to Consumer Debt Relief

Are the government’s efforts to help consumers get out of debt and save their homes helping or hurting? Let me know with your comments from the field.

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Phone skills and sales scripts can be a huge advantage in any sales discipline. However, there are few industries that I can think of where these skills and scripts are AS IMPORTANT as they are in the debt business. Breaking through the threshold of resistance for a customer response is no great than in a debt client. These consumers are beaten, bruised, and battered by fast talking scams, crooks, and collectors. The ring of the phone makes them shrink and cringe with anxiety.

That means you need to keep your skills sharp and continually look for opportunities to change up you game. Review other techniques. Here are some resources to review for new ideas:

• DebtSkinny.com – This is a great site with lots of Debt Relief resources and guides. In particular, I like these simple and straightforward voicemail scripts.
• MSTARS Debt Settlement Training – I have never personally tried these guys, but they seem to be one of only a few that specialize in debt settlement specific sales training.
• LeadCloser.com – This is a relatively new lead related blog, but has some good advice on debt sales scripts.
• Aged Lead Strategies – Yours truly has some ideas on some effective approaches to creating debt settlement sales scripts.

Whether you use these or find some sales scripts resources of your own, you should always be looking to freshen up your sales approach. Scripts can help you test new approaches in a disciplined and consistent way. Making it clearer to see what is and isn’t working in your sales process.

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Texas Attorney General Greg Abbott is pursuing Debt Relief USA, who is currently in bankruptcy with $4.6 million in withheld debt relief promised to clients. The press release from the Texas AG cites 2,500 debt customers as victims. There are some definite lessons to learn in this statement to keep your debt business clean.

• Don’t make unreasonable claims to customers
• Negotiate settlements with creditors prior to managing client payments
• Be properly licensed and bonded in your State
• Do what you say you will do

Here are some of the allegations from the Texas AG:

“Investigators with the Office of the Attorney General found that Debt Relief USA often never contacted creditors on behalf of their “clients,” which ultimately damaged its customers’ credit reports and even led to debt collection lawsuits by creditors. Debt Relief USA customers risked the ongoing accruals of late fees, interest, over-limit charges and other fees associated with the creditor’s account. Therefore, even in the event of a settlement, customers often owed significantly more on their accounts, which reduced their overall debt settlement savings. In addition, any savings realized under a settlement would be subject to taxation, since these are considered “income.”"

I think it is good to keep up on these actions to understand regulatory and legal hot buttons. Obviously you should do things by the rule of the law, but you never know when you can get caught in the cross hairs of change.

Be safe out there and stay compliant!

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Buying aged leads is one of the most economical marketing methods. You are getting consumer inquiries (hand raisers) at a fraction of the original price. Obviously, there is a reason for that discount. However, many folks make aged mortgage or debt leads a primary element of their marketing strategy.

How do they do that? Simply by thinking through all the various opportunities within each lead.

The Obvious

Most people buy and work aged leads with the obvious approach. Naturally mortgage and debt leads are categorized by how they were originally generated or targeted (i.e., refinance, purchase, debt settlement, loan modification). That typically leads people to simply call and offer products and services in that same category. Chances are the borrower’s situation has significantly changed since the original lead was generated.

That is where savvy lead buyers get creative.

The Cross-Sell

As you are developing your sales process for aged leads think about the type of people you are calling and what may be going on in their financial lives. This critical thinking is likely to give you alternative approaches to convert the lead and help the customer.

Refinance Mortgage Lead – Many people that are coming to websites and responding to emails for mortgage refinancing are homeowners struggling to make their mortgage payments. This could be due to a job loss, resetting mortgage rate, or mounting debt.

This means that you can easily talk to these clients about loan modifications or debt settlement solutions. In addition, you should make sure they didn’t already refinance into a mortgage that puts them in an even worse position, which is becoming increasingly common.

Loan Modification Lead – In this case the obvious approach may just work. Loan modification programs have gone through so many iterations and fluctuations most attempting to get one are unsuccessful in their first attempts.

However, loan modification customers are typically also in need of debt consolidation or settlement services and could simply need to refinance a mortgage.

Debt Lead – Borrowers looking for debt relief are often unsure of what they need. They know that they can’t pay their bills, but are unsure how to fix it. The remedy could be as easy as a loan modification, refinancing a depreciating home, or consolidating high interest rate cards.

Don’t simply look at or buy aged leads by the “original” label. Think beyond what the marketer labeled them and think about what the consumer is probably really looking for—loan modification, refinance, debt relief. Write your telemarketing script to offer a full range of solutions. You just might find yourself closing more loan modification deals with mortgage refinance or debt settlement leads.

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According to a recent New York Times article the FTC‘s effort to shutdown misleading debt relief companies may reach too far.

Initiatives underway are calling for debt settlement to fall under the umbrella of debt collection style telemarketing rules. In addition, it will target many of the up-front fees that sustain debt-relief companies. According to the New York Times the proposal looks like this:

“The proposal calls for a regulatory switch that would apply telemarketing rules to debt relief companies that receive telephone calls in response to advertising, as well as to those that reach out to consumers. It would ban debt relief companies from charging fees before providing services; prohibit them from making misleading claims about how fast they can help or how much money they can save for someone, and from masking for-profit companies as nonprofit agencies.”

Many debt settlement businesses think that the FTC lacks an understanding of their business model and may end up hurting people that need their services.

One representative of the debt industry explained it like this:

”Our goal is to try to get people out of debt, but in a sense this would make us a creditor as well,” said Wesley Young, the legislative director for The Association of Settlement Companies, a trade group for the industry. He noted debt settlement can take two or three years, leaving companies providing lengthy services without taking in any revenue, and possibly then being left holding a bill if the consumer doesn’t pay.

A case involving numerous creditors and substantial debt could require numerous phone calls for settlements to be arranged, Young said. ”We think this will hurt the service we provide to the consumer and they’ll be less successful in the programs.”

What do you think? Is the FTC protecting the consumer or potentially wiping out the viability of the businesses that can help them?

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New York State Attorney General Andrew Cuomo announced a nationwide investigation into the debt settlement industry. This has always been an aggressive office for consumer protection. The debt industry is a necessary survival tool for many consumers that have gotten in way over their heads with easy credit. Unfortunately, many scam artist are willing to scam these already desperate consumers.

“Today, millions of hardworking Americans are finding themselves imprisoned by debt. In response, a rogue industry has stepped in, offering consumers false hope, charging tremendous fees, and leaving them in a worse financial situation,” said Attorney General Cuomo. “Our mission is clear: to hold unscrupulous businesses accountable; to rein in a renegade industry; and to ensure that people are not victimized when faced with financial hardship.”

As part of his broad investigation of the debt settlement industry, Cuomo today issued subpoenas to fourteen debt settlement companies and one law firm: American Debt Foundation, Inc.; American Financial Service; Consumer Debt Solutions; Credit Answers, LLC; Debt Remedy Solutions, LLC; Debt Settlement America; Debt Settlement USA; Debtmerica Relief; DMB Financial, LLC; Freedom Debt Relief; New Era Debt Solutions; New Horizons Debt Relief Inc.; Preferred Financial Services, Inc.; U.S. Financial Management Inc. (d.b.a. My Debt Negotiation); and the Allegro Law Firm.

Many in the industry have already tried to self-regulate and give consumers information to sort the bad from the good. Unfortunately, they still creep in and give the good guys a bad name.

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