Goodman spoke with debt settlement industry representatives who countered that former predatory lending companies jumped into their business during the subprime mortgage crisis. Those "bad actors," proponents say, have led to consumer mistrust and government scrutiny. Lawmakers have proposed new rules that would nearly eliminate upfront fees for credit card settlement programs, while capping service charges at five percent of the debt eliminated under a program.
Veteran debt settlement experts told Goodman that their newest competitors structured themselves like Ponzi schemes, collecting significant upfront fees but leaving clients unprotected from credit card legal actions. Legitimate debt settlement companies partner more closely with credit card issuers to help avoid garnishments, lawsuits, or bankruptcy filings.
About the Author
Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.