A Discussion of the Value the Debt Settlement Industry Provides to Consumers - Introduction - Alternatives and FTC Amendments

Sep 16, 2026

Debt settlement industry commentary examines how proposed changes to 16 CFR Part 310 (the Telemarketing Sales Rule) could affect the availability of debt relief options for consumers. The report discusses FTC-backed amendments, consumer complaint trends, and the role of financial institutions, debt collectors, and credit counseling services in directing complaints to regulators. It argues that debt settlement should coexist with credit counseling and bankruptcy under consistent, fair regulation, while emphasizing transparency and improving customer service.

LanguageEnglish

CategoryLetters

FormatPDF

Pages110

Reading Time39 min

AccessFree to download

INTRODUCTION

MISSION OF THE FEDERAL TRADE COMMISSION

ALTERNATIVES AVAILABLE TO DEBTORS

AMENDMENT TO THE TSR

COMPLAINTS

WHAT DO WE OFFER OUR CLIENTS?

CONCLUSION

APPENDIX

# A DISCUSSION OF THE VALUE THE DEBT SETTLEMENT INDUSTRYPROVIDES TO CONSUMERS ## INTRODUCTION MISSION OF THE FEDERAL TRADE COMMISSION ALTERNATIVES AVAILABLE TO DEBTORS AMENDMENT TO THE TSR ## COMPLAINTS WHAT DO WE OFFER OUR CLIENTS?CONCLUSION APPENDIX ECONOMIC FACTORS AND THE DEBT MANAGEMENT INDUSTRY, AUGUST 6, 2009RICHARD A. BRIESCH, PH. D. NATIONAL ECONOMIC RESEARCH ASSOCIATES, INC. REPORT ON CREDIT NEGOTIATION SERVICESSAMPLING OF ADVERSE INFORMATION DELIVERED TO DEBT SETTLEMENT CLIENTS COMPLAINT LETTERS LETTERS PROVIDED BY GRADUATES OF THE J. HASS GROUP DEBT SETTLEMENT PROGRAM THE DEBT SETTLEMENT INDUSTRY is engaged in an on-going battle with financial institutions who are pressing for an amendment of 16 CFR Part 310, commonly known as theTelemarketing Sales Rule (“TSR”) which, if passed, has the potential to bring our industry to astandstill. The Federal Trade Commission (“FTC”), citing to the quantity of complaints it hasreceived from consumers about the debt settlement industry is leaning heavily in favor of thisamendment. The addition of the amendment would effectively shut down one of the onlythree viable alternatives presently available to consumers to assist them in legally eliminatingtheir debt. FLYING UNDER THE RADAR was the original theory in the early days of debtsettlement. While itis true that in the past, as noted in the FTC’s discussion of the proposedamendment at fn 212, that the debt settlement trade association ( USOBA) and companiesthey called have either refused to speak with the FTC or provided vague responses, thereason for this vagueness was that financial institutions would not settle with our clients ifwe publicized specifics about them in regard to settlements. Debt settlement companiesnow understand that advocating clear disclosure and transparency is the best way to achieveour goals and the goal of our clients to be debt free. As such, we have begun to facilitateindustry-wide solutions to perceived and actual problems within the industry, and believethat financial institutions and consumer credit counseling services should do the same. THE NUMBER OF COMPLAINTS that the FTC is fielding regarding debt settlement isindicative of the explosive growth the debt settlement industry has experienced. Thatgrowth will continue, and the number of complaints will drop significantly, if financialinstitutions, debt collectors and consumer credit counseling services are prohibited fromlying to our clients regarding not only our business operations, but whether the financialinstitution does or does not settle with us. 1 Debt settlement, which is both legal and ethical,should be permitted to co-exist with the other alternatives available to consumers formanaging debt. IT IS THE BELIEF OF THE DEBT SETTLEMENT INDUSTRY that all three alternatives, i.e.,consumer credit counseling services, debt settlement and bankruptcy, can and should co -exist and be regulated in the same, even-handed way by the FTC. 1 See September 9, 2009 letter from FIA Card Services to one of our clients (this letter has actually been sent to countless clients, even as we were actively negotiating settlements with them in their capacity as collection agents on behalf of Bankof America); see also, “Consumer Fraud Advisory,” disseminated over the internet by the Law Offices of Barry Sternberg. WHERE DO THE VAST MAJORITY OF COMPLAINTS AGAINST THE DEBT SETTLEMENT INDUSTRYORIGINATE? J. Hass Group’s (“JHG”) research shows that approximately ninety-five percent(95% ) of the complaints it receives from its clients have their genesis in the very financialinstitutions for which it provides a regular income stream through debt settlement. JHG hascompiled and with this report provides a sampling of letters from, and notes of conversationswith, its clients documenting this counter-intuitive stance by financial institutions, and ifrequested by the FTC to do so will provide recordings of telephone conversations with

FAQs

What amendment is discussed in relation to the Telemarketing Sales Rule (TSR)?

The text discusses proposed changes to 16 CFR Part 310, commonly known as the Telemarketing Sales Rule, and describes how the amendment could halt a key consumer debt relief alternative.

Why does the document claim complaints about debt settlement involve financial institutions?

It states that most complaints originate from the financial institutions that refer or provide recurring income through debt settlement, positioning the institutions as a primary source of complaint.

What does the debt settlement industry argue about how alternatives should be regulated?

It argues that consumer credit counseling, debt settlement, and bankruptcy should coexist and be regulated in an even-handed manner by the FTC.

Sep 16, 2026

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