Stronger Industry Regulations Called for by Financial Freedom of America

July 23, 2009 - PRLog -- DALLAS --  Financial Freedom of America announced its strong support today for state regulations that aim to protect consumers from unscrupulous debt settlement companies and restore the tarnished image of the industry.
      Corey Butcher, President and CEO of Dallas-based Financial Freedom of America, said that relatively few companies are giving a bad name to a service that is needed today as Americans struggle with their debt problems.
     Butcher said that the lack of effective regulation in some states has let operators open for business with nothing more than a phone number and a web site. As a result, these companies face few, if any requirements that would force them to disclose information and fulfill promises made to clients about settling debts.
     Butcher has met with representatives of the Attorney General’s office in his home state of Texas about specific regulations he believes would eliminate most of the bad apples that are damaging the industry’s credibility.
   And he has successfully pushed for the United States Organizations for Bankruptcy Alternatives, the largest trade organization for the industry, to adopt stricter guidelines in order to gain membership.
     He recommends that the following requirements be enacted by states that do not already have strong regulatory guidelines for debt settlement and consolidation businesses:

•   Annual license and fee that requires full disclosure of the number of consumers served by the company, the number of agreements in which all debts were settled during the previous year  and the total amount of debt under contract between the company and consumers during the past year.
•   A performance bond as an added protection for consumers that enter into contracts with debt settlement companies.
•   Full disclosure of all fees with caps on the amount that can be charged to set up a debt settlement account.
•   A signed agreement that all marketing materials and statements that contain projected savings and past performances must be accurate and verified.

  Butcher said that some states already have regulations in place that protect consumers. But he believes that many states need to do more to regulate debt settlement companies that are growing nearly as rapidly as the credit card debt of Americans.
  He believes that regulation should be enacted on a state-by-state basis because each state is dealing with a different set of circumstances regarding consumer debt.
   Uniform regulation of debt settlement companies through the Federal Trade Commission would lump this specialized industry in with other financial institutions, Butcher said.  And in doing so, the FTC would take away most of the power of individual states to address specific issues and handle problems effectively.
  Financial Freedom of America has adopted its own code of ethics and client assurance program and has called on all debt settlement companies to do the same.
 
About Financial Freedom of America:

 Financial Freedom of America was organized in November, 2005 and began serving customers on January 30, 2006. Based in Dallas, Texas, FFoA has experienced phenomenal growth as one of the nation’s premier debt settlement companies.
 In less than four years, FFoA has settled more than $50 million in debt for its customers and helped more than 530 individuals graduate from its programs. Currently, Financial Freedom of America is working with more than 4,800 clients to assist them in becoming debt free.
 FFoA has been a pioneer in the debt settlement industry by providing different services to educate clients on ways to stay out of debt as well as delivering results for them.