Debt Settlement Employees Are the Newly Unemployed |
By Kenneth Long on September 7, 2010
.jpg.aspx?width=75&height=75) Debt settlement companies have abused weak consumer protection laws for the past 10 years. A new FTC rule that bans advance fee debt settlement plans has company executives quivering in their boots.
Debt settlement companies have traditionally front-loaded their fees. They do this for two reasons.
- First, their attrition (drop off rate) is so high that they must extract as much money as they can initially before the client falls out of the plan.
- Second, these companies require massive amounts of cash to fuel their marketing. Because of the negative reviews of debt settlement companies, it takes a tremendous amount of money just to find someone that is foolish enough to sign such a contract.
For a debt settlement company to survive, it must dramatically change its tactics. There are only two ways that a debt settlement company could still charge heavy upfront fees. One way is to avoid telephone contact with the debtor. Online enrollments might be favored to do this, although it is unlikely that they would convert many clients without having a high pressure sales agent bearing down on the client until they sign and return the contract. The other way that has been mentioned by the industry is for such companies to move operations offshore. That way they could sidestep the ban.
Either way, for the thousands of sales representatives and support staff that are employed by debt settlement companies, their jobs are coming to and end. Company executives are still telling staff that their jobs are secure. After all, that is what any sales firm will tell its staff up until the moment that their services are no longer needed.
I cannot say that I personally feel sorry for any of these employees, since they have been perpetuating the scam that has been offered by their employers. They are the agents of fraud, deception and false advertising, even if this was at the direction of their employers.
While thousands of debt settlement employees will lose their jobs, it is doubtful that many will stay on unemployment very long. After all, these are the types of seasoned sales agents that debt collectors love to hire!
|
Current Rating: 0 (0 ratings)