16 CFR Part 310 Telemarketing Sales Rule- Debt Relief Amendments #543670-00186

Submission Number:
543670-00186
Commenter:
William R. Mitchell
Organization:
Nationwide Support Services, Inc.
State:
CA
Initiative Name:
16 CFR Part 310 Telemarketing Sales Rule- Debt Relief Amendments
Telemarketing Sales Rule – Debt Relief Amendments, R411001 William R. Mitchell Logan Retoske, LLP Attorneys for Nationwide Support Services, Inc. Nationwide Support Services, Inc. (“NWS”) is a leading provider of support services in the debt reduction business. NWS is a member of The Association of Settlement Companies (“TASC”) and was recognized this year as the “Company of the Year” by TASC. NWS is also “Best Practices Certified” by TASC and has also been certified by BSI. While there has been a precipitous growth in the debt settlement industry, this growth has been caused by increased use of credit cards, the economic downturn and changes in bankruptcy law. Additionally, there is nothing new about using third parties to negotiate the reduction of debt. Businesses frequently retain attorneys to seek the restructure or reduction of monies owed. NWS contracts with marketing companies to provide customer support, account management and negotiation services to the clients enrolled in a debt reduction program. These marketing companies are independent sales offices. In response to the proposed Telemarketing Sales Rule – Debt Relief Amendments, R411001, NWS is submitting two (2) documents for review by the Commission. The documents are: A. Delivering Value to Consumers in a Debt Settlement Program – A Case Study authored by Hasnain Walji, Ph.D. This Case Study provides a complete analysis of the services provided to a consumer in a debt settlement program and identifies the costs associated with providing those services. The Case Study reviews and explains each step of the program, each step’s importance and all costs associated with delivering the service to the consumer. The Case Study also outlines the measured benefits of the program. The study makes important distinctions between the various types of service models within the debt settlement industry. While all firms engage in debt negotiation on behalf of consumers, many do not provide any financial literacy education to its clients. NWS has found that including financial literacy in the program not only materially increases the success of the program for the consumer, but significantly impacts the ability of the consumer to remain financially sound following the termination of the program. It is important to engage the client throughout the program. Each client who enters the program faces financial calamity, endures enormous stress, and often lacks the tools to manage their own financial affairs. Without a high contact and high content program, the client will become overwhelmed, not obtain the results that are achievable by remaining in the program, and leave the program without gaining the tools to properly manage their financial affairs in the future. Proving this type of program requires significant resources. B. Testimonials from consumers who were enrolled in a debt settlement program administered by NWS. Each testimonial was authored by the consumer and is signed by the consumers. The common themes are summarized as follows: (1) Consumers reviewed the other options available to them (e.g. bankruptcy or credit counseling) and determined that debt settlement was the best available option for them due to their financial circumstances; (2) The program was supportive to them and provided the needed results by settling credit card accounts enrolled into the program; and (3) The experience of getting in debt, going through the program and the information learned in the program taught them how to stay debt free and live within their means. The Case Study and the Testimonials show that a well-managed debt settlement program provides measureable debt relief for consumers, increases their well-being, and enhances their financial literacy. The surveys submitted by Quality Survey Services measures the results and consumer satisfaction with the program.