Talk about a business niche that has an unrelenting image problem.
Once again, the debt-settlement industry is making media waves for the adverse repercussions visited on consumers across the country who solicit the “assistance” of companies that pledge debt relief and simply don’t deliver on their promises.
As many of our readers in Texas and elsewhere likely already know from having heard stories or personally being involved with such companies, negative news concerning these business entities is far from singular or surprising.
In fact, the Federal Trade Commission reportedly received nearly 205,000 complaints from consumers last year regarding the questionable or outright unlawful activities of such companies. That number was up by about 10 percent from just a couple years earlier.
For many years, the sweet spot for debt-relief companies has been the massive infusion of cash they have received from strapped creditors trying to shed themselves of mortgage debt and credit card fees. Increasingly, too, medical debt has driven many people to seek help from industry actors.
In a recent article on debt-settlement companies, the New York Times notes a relatively new industry target that promises huge profits, namely, collections from consumers facing daunting student loan repayment obligations.
The pool of customers is indeed staggeringly large, with the Times pointing to persons who are even in their 50s and beyond and still struggling with student debts
The all-too-often bottom line for many consumers seeking help from debt-settlement companies is that they end up owing more money than they did prior to contracting for help.
Although such companies do have best interests in mind, those interests quite often revolve around company principals and not the persons who are desperately seeking help to alleviate crushing debt loads.
Bankruptcy attorneys are professionally licensed, stringently regulated and, importantly, bound by a duty to fully promote the best interests of their clients who are seeking debt-relief assistance.
Many consumers might want to remember that the next time they confront aggressive advertising that promises 100-percent loan forgiveness.
Source: The New York Times, “Companies that offer help with student loans are often predatory, officials say,” Rachel Abrams and Jessica Silver-Greenberg, July 13, 2014