I’m fed up with the sales practices of the majority of debt settlement companies. Every day I talk to consumers who seek my advice after talking to settlement companies. Some of the stuff they were told makes me wonder what planet these company executives are living on. Don’t they know that settlement companies are getting shut down left and right by regulatory authorities? The Attorney General in Florida seems to be “shooting fish in a barrel” at the moment. Four settlement operations have been taken down in Florida just in the last few months.
So I’m inspired to offer some helpful “advice” to the owners and managers of settlement companies. (WARNING: What follows is satire, as in “irony,” as in “I’m joking.”)
20 Tips for Running A Successful Debt Settlement Operation
1. Start your settlement company with no prior experience in financial services, and never having negotiated settlements for anyone. Who cares if you have experience? You’re going to outsource the “back-end” to a settlement processing operation anyway.
2. Don’t bother joining any industry associations or attending any trade conferences so you can stay informed on regulatory changes and acceptable industry standards and practices. Just add a bunch of fake logos and seals at the bottom of your website so you look credible, and save all that monthly dues expense.
3. Hire a bunch of sales “closers” and pay them straight commission so they will sign up anyone and everyone with a credit card debt, whether or not debt settlement is a good fit for their situation. Call them “debt consultants” so the consumers think they are talking to experts.
4. Generate leads by buying an auto-dialer and calling consumers across the nation. Don’t worry about the Do-Not-Call Registry maintained by the Federal Trade Commission. That can’t possibly apply to pre-recorded messages from a financial services firm that has had no prior business relationship with the consumer.
5. Saturate local TV and radio stations with ads that say, “Save your credit! Settle your debts for pennies on the dollar. Guaranteed. Call 1-800-CON-GAME.”
6. Tell consumers that going through a debt settlement program will greatly improve their credit score and not have any negative effect whatsoever.
7. Tell your customers that “this is a bank supported program,” and that the creditors are really patient and have no problem waiting four years to get paid.
8. Assure new customers that it’s fine to “max out” their credit cards with cash advances before they start the program. You’re fee is based on the size of the debt load, so you might as well have the enrolled debt be as large as possible.
9. Charge as much as you can get away with without losing business to competitors. Take at least 15% of the debt up front, and insist that the client pay every dime of your fee before you obtain a single settlement for them. If they drop out because of creditor pressure or legal problems, that’s less work you’ll need to do on the back-end anyway.
10. When a prospect tells your sales rep they are thinking about bankruptcy, train your reps to helpfully explain that “bankruptcy is no longer an option since they changed the law in 2005.”
11. Make sure you have at least 1,000 clients before you spend any money on building your customer service department. Don’t worry about all those frantic customer calls and complaints meanwhile. They don’t have any money saved up for settlements yet anyway because they are still paying off your fee.
12. When a prospect balks at your suggestion they stop paying their bills and pay you instead, have your reps patiently explain that the banks really don’t care. They have insurance and tax breaks that will cover the loss anyway.
13. Promise your clients that you’ll stop all the collection calls by sending out your Power-of-Attorney along with cease communication notices to every creditor on the list. When this causes immediate placement with collection attorneys, pretend that this is the first time a creditor has ever reacted harshly to such a notice.
14. Assure your clients that there is no possibility they might get sued by a creditor. When a client does get sued, tell them to just ignore it because the creditor won’t be able to collect when they get a judgment anyway.
15. When a client calls and asks for a refund, refuse and be completely rude about it, or better yet, just don’t bother returning their phone calls. How dare anyone ask for their money back anyway? It’s past the 3-day recission clause in the contract, so tough luck.
16. When the Better Business Bureau starts sending you inquiries based on the complaints they are receiving, just ignore them. You’re not a member anyway, so who cares?
17. Don’t bother determining which states it’s legal to offer settlement services in. There’s no Federal law that applies, so it’s ok to offer your service in all 50 states, right?
18. To sign up the maximum number of people, let your reps enroll people into programs up to 89 months in duration. Ignore the fact that this is 3 years longer than the Statute of Limitations in most states.
19. Have your clients save up for settlements by sending their money to a bank account that you have access to. That way, when you run short of operating capital, you can just make up the shortfall by borrowing money from your clients.
20. Finally, don’t keep any accounting records and shred everything so if you do get a visit from the Attorney General, they won’t be able to prove you’ve done anything wrong.
Follow the above helpful tips faithfully, and you too can join the legions of entrepreneurs who have learned to successfully exploit the financially distressed American consumer! You deserve your piece of the action. What are you waiting for?