In almost every industry, especially in today's economy, businesses are vying for every consumer they can.
More efficient marketing, better customer service, whatever they can do they're doing.
So why are the debt settlement companies actively turning away possibly the best customer for their product? It's simple...
the money.
Virtually every debt settlement commercial you hear on the radio or tv the phrase "if you have more than $10K in credit card debt we can help you".
If you were to call the number on that ad with only seven thousand dollars in debt, odds are that they won't help you.
In fact, they often tell you to call the creditors yourself.
Something they adamantly lobby against publicly, unless of course you have less than their minimum debt requirement, then they promote it.
Based on my experience I estimate that approximately 1 in 5 calls into a debt settlement company does not qualify because the debt amount is below the company's standards.
Thousands of potential clients are being turned away at a time when they need them the most.
The industry standard fee is 15 percent of the debt enrolled into the program.
Debt settlement company's are simply not willing to bring in clients when making less than $1500 (15% of $10,000).
This happens to be the most confusing aspect of the industry to me.
At a time when State Attorney Generals are requesting settlement data from the larger companies to determine the industry's legitimacy they are turning away clients that would help their cause.
Clients that have less than $10K in debt are more likely to settle and be debt free faster.
It seems simple, they have less debt, have to save less money and therefore would increase the industry's statistics when it comes to how many people they help get out of debt.
So why won't they allow these clients into their program? I can't be the only one that sees such an obvious win-win situation can I? Enroll more clients and increase your debt free statistics at the same time, I'm missing the downside.
The debt settlement companies are missing a huge opportunity.
The data that is being requested from the Attorney Generals has to do with how many clients have gotten out of debt from their program.
Most, if not all, of the companies do not have the data.
They may have partial data but it's incomplete.
And the data they do have arguably is subjective to what they categorize as "out of debt".
Some of the settlement companies may consider someone who has settled one of two debts with their program but the rest without as a win and therefore mark them as debt free.
They have a spectacular chance to increase the requested data and settlement percentages while increasing revenue at the same time.
It is true however that the clients with the lower debt amounts seem to require more attention and work.
This in most cases is the reason behind the minimum debt requirements.
They see the smaller debts and figure it would be time better spent on clients with larger debt and larger fees.
So where does that leave the thousands of consumers with less than ten thousand in debt? Apparently on their own.
Websites have started to pop up to help those settle debt on their own.
And if you look hard enough you'll find a few of the smaller debt settlement companies taking debt amounts down to five thousand.
Enrollments are down, marketing costs are up and the lawsuits from state Attorney Generals are coming fast and furious.
It's not very often that you are given the key to your own jail cell.
The companies that are attempting to gather the requested data are doing the right thing.
And I'd like to take this opportunity to say that their are some ethical debt settlement companies out there doing right by their clients.
You just have to look harder in this industry to find them.