It is time for change. It is time to advance into the mainstream and create a safe, reliable marketplace for consumers facing financial difficulty
New York, NY (PRWEB) July 28, 2017
The Evolution of Debt Relief
The debt relief industry has been rife with challenges over the years. Consumers in financial distress are often faced with limited choices to engage and address their debt problems. Oftentimes bankruptcy becomes their only option to effectively eliminate the stress that is caused by ballooning consumer debts. In the early 2000s, unsecured consumer debt was rising and consumers were finding themselves facing significant financial strain. Financial stress has long been attributed to marital problems, self esteem challenges, depression, despair and have been linked to physiological problems as those stresses take a physical toll on the human’s overall health and well being. The connection between stress and increased mortality rates has been a hot topic in the health and wellness industry and research is substantiating a tangible link between financial stress and increased mortality.
Consumers finding themselves in financial despair due to unmanageable levels of debt have been limited in the options available to address the situation and find relief. At that time, options for debt relief were limited to consumer credit counseling, strategic pay-down methodologies, bankruptcy or simply continuing to pay down the debts using their available means over extended periods of time.
In that vacuum and the need for creative solutions, debt negotiations and settlement was presented to the marketplace. Debt negotiations is a service whereby an experienced negotiator will engage the creditors to present the hardship on behalf of the indebted consumer and present offers to satisfy the debt at a reduced amount generally in a lump sum. Consumers are often encouraged to use their discretionary revenue to create a strategic savings account dedicated to fund the settlement when the negotiations were accepted. In some cases, term settlements were accepted where the consumer could make payments over an extended period to fund the settlement. This option quickly became a popular bankruptcy alternative for consumers finding themselves in financial trouble.
In exchange for this service, fees were paid to the negotiations firm, generally in the form of advance fees. These fees could range from a couple thousand dollars to more than five thousand dollars depending on the amount of the debts owed and the savings the client realized in the process. It wasn’t long before entrepreneurs migrated into the market in droves looking to cash in on this fast-growing industry. Trade groups were established for the industry in the form of USOBA (The United States Organization for Bankruptcy Alternatives), which split into a competing organization called TASC (The Association of Settlement Companies) that also capitalized on the boom. These organizations attempted to create viable self-regulation protocols to govern the businesses and establish best practices. Unfortunately, the organizations were unable to reign in the deceptive practices of many of the firms operating this type of business and the government stepped in to protect the consumers from the rogue behaviors of many companies offering the services.
Inability to Self Regulate
The reality is that by their nature, pay for membership organizations are difficult to self-regulate because of the nature of the business model. When the fees that a company pay are needed to keep the organization afloat or are extracted as a primary revenue system, regulating the members becomes more difficult. If a member deviates from regulated protocols and refuses to be reined in to best practices, the organization should remove that member from its ranks until the member company comes into alignment with the standards set forth by the organization. If the organization relies on that revenue to survive, the decision to do the right thing is compromised. Remove the members, lose the revenue. This system is designed to fail when it comes to self-regulation unless the monetary necessity is removed. Trade associations can be very effective if utilized properly, but best practices need to be established, measured, monitored and enforced. Consumers are becoming very cynical and wary of any icon, symbol, affiliation or branding that implicates credibility. The credibility needs to be real. Many consumers are even becoming wary of recognized credibility tools like the BBB because companies can often pay for accreditation and so long as they respond to consumer complaints, they can maintain their rating.
Over the last decade, industry-wide bad practices have been met with staunch and unrelenting pressure of regulatory enforcement actions by the FTC (Federal Trade Commission) and CFPB (Consumer Financial Protection Bureau). These regulating bodies are more able than ever to identify trends and patterns involving companies using deceptive practices in their marketing and open the door to more thorough examination, often leading to a “house of cards” effect. When a debt relief provider, knowingly or unknowingly, violates standards within the framework of the law, the regulating bodies engage. If they are found in violation of any one of the multitude of laws that govern the financial services arena, law enforcement initiatives are taken. Most times, these companies were not operating correctly, failed to provide the services or deceived consumers with their marketing. Oftentimes, its not the service that is the problem, it’s the consumers lack of understanding of the service they are engaging that lands the companies in hot water. Marketing is a hot topic in every industry but the FTC and CFPB have made no bones about it, the net impression the consumer has about the service based on the marketing and sales pitch used will supersede any “fine print” the company uses in their contracts. If a company hinders the ability of the consumer to make a reasonable decision based on the materials presented, and actual harm occurs, that company is likely in violation of the UDAAP rules (Unfair Deceptive Abusive Acts and Practices).
When a debt relief company engages in deceptive behavior for the sake of monetary gains, the public perception is damaged. When the public perception believes the service itself is a scam, legitimate operators are forced into more aggressive marketing strategies to obtain new clients and the cost per acquisition increases, often needing to be offset by higher fees, limiting the options for the consumers even further. This entire system completely degrades the number of perceived viable debt relief options to the consumers that may benefit from the strategy. The real challenges appear to be in the inability for the industry to unite under one banner. If the compliant, consumer focused firms were to act as a shield for the consumers, helping to root out the bad actors and demonstrate meaningful self-regulation activities, there could be light at the end of the tunnel for the industry. Unfortunately, there are still many companies in that industry that simply don’t have the consumer’s best interests at heart and many that are an outright scam. When the FTC or CFPB shuts down these companies, there are oftentimes hundreds if not thousands of consumers that are hung out to dry.
Until the debt relief industry engages each other, unifies under one set of acceptable standards and embraces self-regulation, the problems will likely persist, further limiting consumer’s options for their debt challenges. Leaders in the debt relief industry appear to be rallying around an event in September of this year that is attempting to change the way the industry operates. The evolution is much needed and appears that the event is trending in the industry. This major event is set to be held in Las Vegas under the name Revolution 2017 (or Revcon2017 as they are coining it), using hashtags such as #changeiscoming and #wearetheindustry on social media. Based on the event website, Fintech innovations, regulatory presentations, compliance, ethics and consumer outreach seem to be on the menu. One thing seems apparent, the industry itself wants change and it looks like they are making strides to get there. The event appears to finale into a celebrity charity poker fundraiser for a nonprofit that helps families that have suffered trauma, tragedy and loss. If this industry can ever unite, self-regulate and create a safe marketplace for consumers, the entire economy will be changed for the better.
Quoting Matthew Hearn, industry veteran, compliance expert and pioneer of the Revcon2017 Event, “It is time for change. It is time to advance into the mainstream and create a safe, reliable marketplace for consumers facing financial difficulty. It is time for new innovations to streamline the processes and new synergies to ease the pinch-points for consumers involved in these programs. The regulation must come from within the industry. Self regulation is very possible, and necessary. You cannot perceive a new future with old eyes. We must change the way we think and engage. These consumers are no different than our own families. We need to step up our game substantially."
Bill Jones, CEO of Datapult Marketing added, : "Household debt is reaching the record highs of 2008, but the industry's marketing needs to perform at 2017 levels. We intend to revolutionize the industry's marketing strategies with better data, to reach the right audience, with the right message at the right time. Fortune 500 companies are using emerging technologies and advanced data analytics to increase their ROI. This industry is about to meet that tech at Revcon2017 and it's about time." Along with emerging technologies being unveiled at Revcon2017, service providers are also innovating their offerings to better round out the debt relief offerings. “If you’re in the debt settlement or management industry, and you don’t have a solution on helping your clients with their credit, then you’re really doing them an injustice", says Ryan Duncan, owner of Dispute Services, a pay for performance credit restoration firm and showcase company. He continues, "We're unveiling a few innovations of our own, but we won't reveal anything until the event. This industry is about to get a major upgrade on all levels". Chris Queen of Debt Pay Gateway added, "We have been creating and utilizing advanced audit and on boarding programs to ensure a safe network using our banking platform. If even one bad actor gets into your network, they can be a huge liability to the entire group. It is all about creating compliant, cooperative, consumer focused networks. DPG is always at the forefront of this vision and we couldn't be more excited to be a part of the leadership team at Revcon2017. We are ready to partner together to usher in a new future in this space."
"The debt relief industry is always changing and evolving and certainly is growing. There has been a lot of progress made by the industry veterans and even within our own company, Veritas Legal Plan. We welcome the opportunity to align ourselves with industry leaders who shares the same vision and passion - a primary focus on helping the consumer." stated Angelo Anzalone of VLP, a legal insurance provider for consumers enrolled in debt relief programs. "Growing up, my mother would say to me, "Tell me who your friends are and I'll tell you who you are". We are proud to be a part of a community that comes together to encourage fairness, trust, compliance, advocacy and transparency and anyone who knows Matt Hearn, knows that's what he's all about. Over the years, Matt and MSTARS has shown a strong desire to forge alliances and create cooperative synergies with those with the same mindset and we look forward to continuing to collaborate to make this industry even better. Whether you operate an exemption model or performance model, settlement, student loan relief, or any area of debt relief, you need to know the rules and how to limit your liabilities from all sides. With the CFPB and FTC aggressively going after companies they feel are misleading or harming consumers, it is imperative to have the compliance tools necessary to survive. Anyone with the mindset of longevity should attend. The Evolution2011 event they held was the event that changed everything for us and really birthed our business. When I heard they were launching Revcon2017, I sponsored immediately. I'm honored to be a part of this initiative.You really have seen nothing like this before. It will change everything for you and your business." Veritas is one of the key sponsors of the event.
With speakers like Harvard PhD Dr. Larry Taylor, a media psychologist who will be presenting on how to use today's emerging technologies to create cross vertical marketing and create meaningful conversations with potential clients to Jason Drees, a world renowned Tony Robbins executive business coach turned ultra-successful BPO expert who will show companies how to properly leverage outsourcing and offshoring technologies to streamline and grow the operation, this event is certainly turning heads.
Other speakers include Tim Li, holding business degrees from Harvard Business School, San Jose State and University of Southern California, and one of the most successful Fintech pioneers in the field. Creating financial technologies like Kuber, MaxDecisions,RocketLoans, RealtyMogul, Kabbage, LoanDepot, Mosaic, Blinker, Think Finance and advising firms like JPMorgan Chase, he will be presenting on integrating Fintech tools into a business to increase conversion, simplicity and streamlining the operation with automation.
Also contributing to the event will be Stephanie Rosenthal, Chief of Staff with the FTC who will present on behalf of the FTC. There will be a panel of the top regulatory defense attorneys, like Michael Thurman of Thurman Legal, helping companies pioneer solid compliance management plans and keep those companies in a solid compliance position. A creditor and collections panel will be presenting on creating efficiencies, synergies and best practices for negotiations and will be looking to create synergies with companies willing to work towards cooperative concepts. There will also be 2 surprise speakers that are sure to drop jaws and a thought leadership piece by James Lanctot that will lead to perhaps the most monumental evolution this industry has ever seen. His research spans decades and could literally reshape the entire industry. This is an event that should NOT be missed.
Revcon2017 involves every single verticals involved in the debt relief and financial services space. The changes taking place will literally impact every type of firm. From tax resolution, corporate debt resolution, debt settlement back ends, marketing affiliates and front ends, credit repair, student loan debt relief, debt management, credit counseling and more. The latest trends in Student Loan Debt Relief are really disturbing and there are some things happening in that vertical that no one is talking about. The DOE is developing a portal that could eliminate the entire vertical overnight. That is definitely worth talking about. The addition of new verbiage on the DOE NSLDS system interface should also serve a warning sign that change is coming. Student loan relief firms should be talking about this and making preparations. Revcon2017 will be talking about this and will be providing the solutions the industry needs to navigate successfully. There are a lot of student loan relief companies that are operating completely out of compliance and many, in fact, are breaking the laws believing they are compliant. Calling the company a "Document Preparation" firm does not make it so. Read the details of the CFPB and FTC lawsuits against players in that business and you will quickly find out that they are likely operating a debt relief service afoul of the TSR Amendment. If the company interacts in ANY way as an intermediary between the student and the DOE, they are providing a debt relief service, plain and simple and must comply with the TSR Amendment. How residual streams are collected for continuing services like re-certification on income sensitive plans should also be addressed and evaluated against the current laws. If a company is collecting fees via credit card, they are likely breaking the laws. Every company operating in this vertical should attend this event. It very well could save their lives. Increasing ROI, lowering CPA, integrating technologies to drive improvement, better marketing strategy using big data, compliance guidance, new synergies, increasing operational efficiencies and leveraging future forward tech? Add sound, lights and staging by award winning Eden Audio and a few incredible thought leaders to inspire the industry forward and this is shaping up to be one amazing event!
The world is watching and the industry leaders are determined to change the way this industry operates. The consumers have seen enough carnage at the hands of unscrupulous actors in this and other financial service industries. Until that time, however, buyer beware. Consumers must do their due diligence and research everything. Consumers should not be sold into a pie in the sky “program” in exchange for an exorbitant fee. When personal finances are at stake, they must be cautious or they may find themselves in hot water or even worse, completely scammed. The superheroes are out there and are uniting at Revcon2017. They will make a way forward and shape the future. One thing is certain, however, CHANGE IS COMING.
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For more information about this event, please contact the Revcon2017 staff.