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Hello, if you would like more help with your debt please visit the link below
www.debtsettlementorder.com
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The gist:
Commercials are aired on television and radio throughout the day, flashing and repeating toll free
numbers for you to call, promising to drastically reduce your debt, or save thousands of dollars.
What the consumer does not know, is how things operate on the other end of these
advertisements. Here is how it works:
The consumer calls the number flashing on the screen, or repeated over and over in the radio
spot. A person answering on the other end will ask perhaps 3-4 qualifying questions. Depending
on the answers to the questions, the call is then re-routed to a call center or settlement firm with
their own internal sales floor.
This type of advertising, at its peak last year (perhaps some will pay this even today) ran
anywhere from $75.00 to over $100.00 per live transfer. A good (meaning productive--not
necessarily ethical) call center in this industry, paying for, and working these leads, has a cost per
acquisition (CPA) of anywhere between $600.00 to $1200.00. They have to run a 20% close ratio
or higher, in most cases, to hit their numbers. That means they have to approach what they do as
a sales process rather than a consultation process.
The majority of people sold into settlement, in my opinion, don't belong in it. Either the process
was sold as butterflies and rainbows, or the plan, due to high upfront fees, which are often
successfully disguised to the average consumer stressed to the gills and looking for relief,
provides for high incompletion and program drop rates. The higher the fee, no matter how it is
calculated or paid, is one of the bigger stumbling blocks to being successful in working with a
settlement company. The fee itself can prevent the consumer's success. Fees average 15% of the
total debt that is submitted for settlement. Why so high? Often enough, the fee amount is related
to the juice, but I am getting ahead of myself.
The only ethical way to promote settlement as an option is from a consultation/informative
perspective where there is no pressure to hit a quota due to high CPA. If a company does any
national advertising or purchases live transfers from a national advertiser whether radio or
television, it is nearly 100% assured that they are using a sales approach. They must closely
monitor closing ratios of the phone staff, and cut anyone occupying a chair who doesn't hit the
numbers. I have visited a few call centers. The majority of men and women in these call center
atmospheres are best defined as telemarketers. There are, I am sure, exceptions. In fact, I have
met some. That is not the norm though. These are the same people who will be just as effective at
telemarketing residential home siding, as settlement services.
The juice:
Your future... sold to the highest paying servicer! On first contact, if you are not talking to the
company that is actually going to handle your file, you are talking to a sales guy. His motivation is
selling you into settlement, whether or not it's a good fit for your situation, in order to get a
commission. The criteria for where the sales guy will refer you, in my opinion and industry
experience, will not be based on who does the best work, who has the most success with
consumers, who will best serve your actual needs for getting out of debt with a settlement process,
or who is going to charge the least so that your money actually goes to your creditors. It is
absolutely (and unfortunately) predictable that the vast majority of those selling settlement, will
gravitate to referring you to where they will get paid the most. You will seldom be referred to a
servicer whose fees do not maximize the commission sought by the sales person or the company
they work for.
The investment required to run one of these centers requires their owners to search out the
companies that pay the highest commission for the referral. I have both seen and heard reference
to as much as 70% - 80%, payouts of client fees for referrals. Ridiculous? Absolutely! This model
is unsustainable for any long period of time. The marketing firm will just move onto the next back
end servicer who provides the highest commission. I have witnessed it. Hess Kennedy gets shut
down, the sales center then refers to Allegro. Allegro is now shut down, so they will move onto the
next. If you're reading this and are wondering if you are a victim of the "gist & the juice", the
fact that you're wondering means you probably are.
The price for all of this is passed onto the consumer. They are the ones paying for it through their
wallet/purse, and also in the form of lost time and opportunity for the fact that settlement was
never the right option for many of them in the first place. They were sold into it.
The lies:
One of several fabrications, or shall I say "massaged facts" used by the settlement sales person is
a manageable monthly payment into your settlement fund, thereby extending program length. This
is huge, and is used repeatedly because of its success. For example: You have $30,000 in
unsecured credit card debt and are paying interest rates somewhere in the 20% range. Your
struggling to meet minimums and are looking for options and respond to an add to "settle for
pennies on dollar" or "Get your piece of the bailout and settle with your creditors". The sales pitch
is to put you into a settlement program where you will not be paying your creditors and saving
$416.00 dollars a month for 36 months. This is half your current debt. Well Shazaam!
That sounds like the kind of relief you are looking for! Your monthly minimum payments, at the
high interest you are stuck at, equaled a thousand plus, and this nice man or woman is saying you
can be out of debt for the low-low price of $416.00 a month. This is e-a-s-y to sell. This type of
relief being offered is what many of us would focus on, no matter how much more there is to the
pitch. It's human nature. It's the relief we need, and we found it. Some will outline a 42 month plan,
or even longer. E-A-S-Y.
Here is the problem. The longer it takes to settle with your creditors, the higher the risk one or
more of your creditors will sue you in court in order to collect the debt. Where is your sales guy
when this happens? Did he mention you could be sued? Maybe in passing, and if so, he probably
said it is very rare to have that happen. What you were not told is that the longer your program
lasts the more risk you face of being sued. That would take away all of the relief you felt from
having been paying over $1000 a month, to now saving less than half of that a month for
settlement. That little massaging of facts goes a long way for the sales close ratio.
The truth about settlement is; you have to be aggressive. You have to put every available penny
aside to settle the debt as fast as possible in order to avoid something as adverse as a lawsuit.
The relief you will find by using a settlement approach is not going to come until the debt is gone.
Settlement is the "rip the band aid off" approach, rather than picking at the corners.
How big is your risk of being sued along the way? It will be different for everyone. It can depend on
how fast you can settle, who your creditors are, who they may assign the debt to, who a creditor
sells your debt to, what your credit report looks like, the state you live in, transaction history on the
account leading up to default. Is a debt settlement sales person going to go over that with you?
Lawsuits filed, in order to collect on unsecured credit card accounts, are generally a pretty low
percentage compared to how many accounts default each year. I believe those numbers will start
to increase in what's left of 2009 and into 2010. The two largest card issuers in the U.S. have been
huge participants in submitting defaulted accounts for arbitration, an alternative dispute resolution
done outside of the courts. The National Arbitration Forum and the American Arbitration
Association have ceased all arbitration activity relating to consumer credit cards this summer.
Card issuers will likely increase the accounts they place with collection law firms as a result.
At Consumer Recovery Network, we do NO paid advertising. We do not have sales people. When
you consult with CRN, you are talking to a specialist on first contact, someone who works with our
members and their creditors every day.
If you have hit the debt wall and want to learn about all of your debt management options,
including debt settlement, visit http://www.consumerrecoverynetwork.com. While you're there,
learn about becoming a member of Consumer Recovery Network, with no risk to you, and
schedule a consult to find out if you should pursue debt negotiation.
By: Michael Bovee
CRN President
I have been working in the debt and credit industry for over 10 years helping consumers to deal
with the influx of issues associated with this industry. Needless to say, I've learned alot over the
years and use that knowledge to continue to assist consumers on a daily basis.
Please feel free to contact me personally at michael@consumerrecoverynetwork.com or you can
fill out our online free debt consultation form.
Article Source:
http://EzineArticles.com/?expert=Michael_Bovee
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Hello, if you would like more help with your debt please visit the link below
www.debtsettlementorder.com
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