Many of these companies are taking advantage of customers because of the shaky economy
Roslyn Heights, N.Y. (Vocus) June 30, 2010
Startling reports from the New York Times claim the majority of debt settlement companies are fraudulent or deceptive, with very few businesses working towards the best interest of their clients. Emerge America, a debt settlement firm, recently spoke out on this issue, stressing the importance that consumers do their research and understand their options before they choose a less than legit debt consolidation firm.
“Many of these companies are taking advantage of customers because of the shaky economy,” said Branson Hamilton, managing director at Emerge America. “Their front-loaded fee structure causes high dropout rates and gives credible companies a bad name.”
When the debt settlement industry first developed, companies worked on a performance based fee structure. Very few companies follow that model now.
“Companies that have a front-loaded fee structure do so to increase cash flow,” Hamilton states. “Usually they collect about 80% of the fees before they can even settle anything. This leads to creditors calling their customers incessantly and frustrated debtors dropping out of the program prematurely because they see no settlements while their situation worsens. Usually people who are facing bankruptcy fall into this debt settlement trap out of desperation.”
Emerge America, a company that offers a performance based fee structure for its debt settlement plan, agrees with many of the key points of the frustration that have prompted proposed legislation changes by customer watchdogs. “We applaud any effort that would help remove the bad actors from our industry,” said Hamilton.
“Debt settlement is a very attractive alternative to bankruptcy, and it works well if it is done right,” Hamilton said. “Some people will tell you anything to get your money which is unfortunate. But there are good players out there, and it’s all about doing your research.”
About Emerge America
Emerge America is a leading debt management company, serving individual consumers as well as small to midsize businesses with the industry's most innovative debt settlement services. The company is a proud member of the IAPDA (International Association of Debt Arbitrators). Emerge America is one of a handful of debt settlement companies in the industry that collects its settlement fees ONLY AFTER a bona fide settlement has been achieved. This is referred to as a "performance based fee" structure, versus what most of the debt settlement industry follows, which is referred to as a "flat fee" structure. Armed with many years of customer service, settlement and negotiation skills, the management and staff offer outstanding support to its customers.