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The FTC hosted a public forum on November 4, 2009 to discuss a proposed “advance fee ban” and continued tightening on “disclosures and misrepresentations” related to the debt settlement industry.
The meeting was certainly packed with all of the major players in the debt settlement industry from practitioners to industry advocacy groups, like TASC. However, also present were a cadre of Attorneys General from various States and representative of the Credit Counseling industry sitting in support of these new proposed FTC provisions.
Just prior to the meeting industry advocates were making their case to the press.
Credit Solutions one of the leading debt settlement companies in the market and a charter policy partner of the United States Organization for Bankruptcy Alternatives (USOBA) made the case that the FTC should not pursue an all out ban on advance fees, but rather apply additional restrictions. Their argument, laid out in this press release, is that an out-right ban would force 84% of debt settlement businesses to close. However, adding additional restrictions in line with the Uniform Debt Management Services Act (UDMSA), which they support would clean-up the industry without reducing options for consumers in trouble with their debt.
Meanwhile, The Association of Settlement Companies made a similar plea in their press release:
“Debt settlement has been and should remain an option for the tens of thousands of consumers who are facing financial difficulties,” Dave Leuthold, Executive Director of TASC, said. “Especially in this tough economic climate, consumers should have more financial tools at their disposal, not fewer.”
The FTC is reporting that results and transcripts from the meeting should be available within the next month. It will be interesting to review the discussion.
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