Consumer Advocate Credit CounselorsVerbraucherschützer Credit Advisor
Effective September 25, 2008, the FTC hosted a full-day Consumer Protection e the Debt Setting Industrie seminar in Washington, D.C. to assess economic activity within the for-profit public sector and its effects on consumer and corporate markets. Discussions included the past and future of the sector, the promotion and commercialization of credit recovery offerings, the roles of external leads and other suppliers, regulatory evolutions in the sector, and opportunities to deal with consumer concerns and educational needs.
The demands for state and statewide regulations were pressing throughout the entire conference and were presented as a necessary measure to ensure the continued viability of the sector, despite documentary evidence of sector self-regulation and developing commercial practice. These four workshops focused on the serious issue currently confronting the public sector in terms of legality.
A number of respondents to the debate, who represent consumer, bank and credit interests, challenged the need for credit regulators and preferred that they either work directly with bankers and lenders or obtain credit advice from a not-for-profit consultant. Spokespersons for consumer groups and other non-sector-specific panellists strongly concentrated on high charges, pre-paid tariffs, uncertainty about programme closure ratios, a failure to clearly disclose to the consumer, and the intrinsic incapacity of the resolution firms to ensure a reduction in the amount of money to be paid, despite widespread advertising to the opposite effect, as reasons for anxiety.
Branch leaders stressed that not all processors are the same and that members of business associations and others should deliver thorough information before customers make payment for their service. There were four panel discussions with panellists from the credit regulation sector and various consumer associations, as well as bank and credit sector professionals and the rule of law.
Panels 1: Survey of the for-profit credit regulation industry: Comprehension of the origins of the industrial - Panellist 1, which had no representative of the resolution sector, examined the development of the profit-oriented credit regulation scheme and drew differences between this scheme, non-profit credit advisory firms and profit-oriented suppliers of credit managed schemes ("DMPs").
National Foundation for Credit Consulting and American Association of Default Management Organisations officials witnessed the important difference between credit advice and redemption, the legislation that applies to different kinds of companies, and the proven success of credit advice and credit management services. Discussion participants generally agreed that the public sector needs stronger regulations and better consumer implementation in the field of public sector credit management.
Panella 2: The profit-oriented credit regulator now: The best way to get your money back: Prospects on current trends and practice in the sector - Panels 2 provided the opinions of the financial sector, the Consumer Federation of America and three representative bodies of credit regulators. The mixture of attendees enabled a fruitful discussion on the different commercial practises and schemes of resolution firms, the industry's self-regulatory endeavours and the view of the bank sector on resolution policy.
Each of the three winding-up actors emphasised the benefits they provide to the consumer by emphasising their full disclosures standard and other regulatory compliancy actions, while at the same time recognising the differences in pricing schemes and performances of winding-up actors. Particularly significant was Virginia O'Neill of the American Bankers Association's claim that the bankers' association considered the indebtedness regulation sector superfluous and provided high-priced financial products that could instead be negotiated directly by the consumer with the bank in order to obtain them free of charge.
Ms O'Neill explained that indebtedness regulators do not create added value and only hinder the operation of banking institutions, and it is the bank's policy not to address indebtedness regulators (although these commentaries were later contested by several regulatory discussion participants). Ms O'Neill argued that consumer advice should be provided only by non-profit credit advisory firms and demanded minimal requirements for the publication and licence of credit regulation firms, if they are to have any.
Eventually, Travis Plunkett of the Consumer Federation of America suggested the notion of an alternate for the consumer, somewhere between insolvency and repayment of debts by a for-profit corporation. Mr. Plunkett thinks that there are five major issues with creditors: how to manage debt: Mr Plunkett suggested market-based approaches that should encompass both creditor collaboration and regulation-based approaches oriented towards objectively unavailable information (a mood that repeats itself later in the day).
Mr. Plunkett also voiced the view that the sector is often by nature deceptive and that general FTC and prosecutor investigation and further prosecution are appropriate. Part 3: Consumer protection: Discussion on the challenges of consumer protection - During the third panell, panellists had the chance to explore some of the controversial questions related to the promotion and promotion of consumer credit regulation service.
Consumers' supporters of the panels have been intensively concerned with what they consider to be misleading allegations (e.g. x% of x -month debts reduction) and the total absence of information on fees in first listings. Branch managers advocated the absence of information on fees and referred to the individuality of the respective consumer programme and thus to the individuality of the fees paid.
Branch leaders emphasised that the members of the two large business organisations should make sure that customers are fully informed about charges and all other contractual conditions during their advice. Consumers' attorneys also expressed concern about the use of third-party advertising and leads generated in the transaction processing. You believe that these relations make consumer safety more challenging.
Eventually, the FTC employees used fake web advertising that contained rights to "debt repayment", money-back warranties and low month payment for billing service. Panels 4: The Futures of the For-profit debt regulation industry: Wherever Will the Industry Go From Here - Panellist 4 has taken a tough look into the past, trying to pinpoint the kind of immediate measures demanded by panellists from business, state governments and consumer groups.
Jenna Keehnen, Managing director of the United States Organizations for Bankruptcy Alternatives ("USOBA"), said the committee felt that more openness and trustworthiness would benefit all interests. Several non-industrial panellists demanded federally -regulated legislation with room for more government intervention. There were some who firmly believe that the Uniform Debt Management Services Act (a pilot act passed so far in four states) has the capacity to harmonise state legislation, but is currently being passed in too different a form to do so.
Consumers' voices unanimously argued that statutory disclosure should cover fee disclosure, credit implications, taxation implications, garnishments and possible alternative ways to repay debts. Mr Keehnen explained that USOBA members and other winding-up societies are already making the disclosure supported throughout the entire working day as well as behaving responsibly.
Keehnen also said that the USOBA is conducting research independently to showcase the value of the sector, and called on the FTC and others to keep the credit advisory sector to the same standard. Next, the FTC is expecting to use the information collected from the workshops and other resources to produce a paper that could continue to provide a foundation for further regulatory action in the settlements area.
It is now a matter of whether the FTC or others will work to fully and durably remove the indebtedness regulatory sector or whether they will introduce supplementary rules and enforcements and/or issue guidelines to the sector. The FTC has issued extensive guidelines to consumer interests in this area, but has not provided guidelines to the resolution sector on what it believes to be good practice.
Whilst all respondents felt that financially distressed customers need choices and that some customers may find some way of negotiating a benchmark appropriate, few, if any, non-sectoral respondents supported the actual promotional market practice of the liquidation sector. Meanwhile, using its powers under Section 5 of the FTC Act (which forbids dishonest and misleading commercial practices), the Credit Repair Organizations Act, the Gramm-Leach-Bliley Act and other Federal laws, the FTC will remain in a position to take execution measures against collection agencies and their vendors and other suppliers.