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Date May 26, 2009

Regulation Needed For Debt Settlement Companies, Say TASC

Regulation Needed For Debt Settlement CompaniesFollowing a string of controversies, TASC or The Association of Settlement Companies, have released a statement saying that they are pushing for legislation that will regulate debt settlement companies on both the state level and the national level. TASC is a non-profit organization which claims to be the watchdog of the debt settlement industry.

The debt settlement industry has seen large growth this past few months owing mainly to consumers desperate to find a way to control their debt. The economic crisis has severely curtailed consumer finances. Coupled with the fact that banks are cutting down credit to reduce risk on their side, consumers with debt are scrambling for every possible opportunity to cut it down to more manageable levels or eliminate it completely. Debt settlement, being one of the ways that consumers can do this, has therefore become quite profitable.

Unfortunately, many consumers have had bad experiences with several debt settlement companies. Some debt settlement companies have been downright deceptive in their practice and their customers ended up paying enormous fees without seeing any benefits. The practice has also become much publicized and some companies have been sued. These practices, while enriching some debt settlement companies, only hurt the debt settlement industry in the end.

TASC President Chris Kesterson recently said, “Fair legislation will help eliminate the bad apples from the industry while addressing the concerns of critics and regulators. At the same time, we want to continue helping consumers struggling with their debt to get back on their financial feet”.

Currently, TASC is at work with several bills such as California and New York’s the Debt Management Services Act. The one in California is Assembly Bill 350 while the one in New York is Assembly Bill 7268. here are also bills in progress in Nevada, Tennessee and Texas. The one in Texas is Senate Bill 2233, in Tennessee it is House Bill 1278 and in Nevada it is Senate Bill 355.

TASC has lobbyists working for these bills in several states as well as in the nation’s capital, Washington D.C.

With regulation in place, TASC hopes to restore the credibility of the debt settlement industry which has taken quite a hit due to the many controversies that have happened within the industry. Currently, many industry experts are skeptical of the capability of debt settlement companies to help out their customers. Some credit card companies are also wary of debt settlement companies and refuse to deal with them entirely.

Date May 14, 2009

The Dangers of Debt Settlement Companies

The Dangers of Debt Settlement CompaniesIf you are one of the many Americans who have found themselves having to deal with large debts, then you probably have given some thought on getting help from debt settlement companies.

If you do not know this yet, debt settlement companies offer help for people with debt problems. Usually, they negotiate with credit companies to give their customers a lower monthly payment rate or to write off a part of their debts. It may seem like a good deal but the reality of the matter is actually less comforting.

A credit counselor from The Village Family Service Center in Fargo says, “Most of the time, it doesn’t work out very well.”

Unfortunately, the current economic situation offers a great market for those who want to make quick money out of debt settlement schemes. Some are even frauds that just take money without really helping their clients. Others are newcomers to the industry and are not capable of offering a good deal to their clients and may actually make matters worse for them.

Companies that offer debt settlement are also known as debt arbitrators or debt negotiators. Debt settlement companies are usually ‘for pay’ companies. Most of the time, their clients have to pay a considerable sum even before their debt arrangements are actually changed. Some debt settlement companies can also ruin their clients’ long term credit.

As more and more Americans go into debt, debt settlement companies are seeing a rise in demand for their services. Critics are also becoming more vocal in their condemnation of the shady practices of some debt settlement companies. Even the debt settlement industry itself sees and acknowledges these practices.

President of The Association of Settlement Companies, Chris Kesterson had this to say, “There are bad actors in our industry. There are bad actors in every industry.” Kesterson also serves as chief executive of Debt Settlement America, a debt settlement outfit based in Dallas. Chris Kesterson’s association boasts 155 members.
Although acknowledging the grimier side of the debt settlement industry, Kesterson also state that debt settlement companies that have the proper experience and competence are also working in the industry. These companies offer solutions to people with deep debt problems, especially when no other option is available.

If you are one of those who are looking into debt settlement as a solution to your debt problems, the best thing that you can do is to research the background of the company that you plan on seeking help from. Beware of companies that are not forthcoming when you ask them questions. You should also ask around and listen to the advice of people who have used debt settlement companies before. If you plan on approaching a new company, make sure that they have experienced people working for them. However, you are probably best served by a company that has been in the business for a long time and has a long list of previous clients.