According to the laws that governs debt and debt relief services it is illegal for any debt relief service provider to misrepresent any aspect, material or immaterial, regarding their services either by implication or explicitly.
Moreover, the law also defines the material aspect of a debt relief service and includes in it any information that can probably affect the decision of the consumer in whatsoever way to sign up for a specific debt relief program or to choose a specific program over another. According to the law a few examples of material claims are:
- The amount of money or the percentage of the total debt amount saved by the consumer after using a specific service
- The expected time required to get the results through a specific service
- The amount of money or the percentage of each outstanding debt the customer has to accumulate before the negotiation with the creditor starts to settle or modify the terms
- The final effect of the service would have on the creditworthiness of the customer
- The effect of the service on the collection efforts made by the creditors or debt collectors
- The exact number or percentage of the customers who have received such services and have gotten the results through such service and
- Whether or not the business is an authentic nonprofit entity.
The best way to make sure that you choose the right debt settlement service provider is by doing some research and reading the debt settlement reviews. This will ensure that you make the right choice.
The law allows the debt relief companies to base their claims especially in the ads on the previous experiences that may have had of some previous customers. However, in this regard, the company must make sure that such ads acts as the representative of the entire population of the past customers that are relevant. To make sure that you accomplish this requirement of the law you may follow these steps among other things:
- Using appropriate sampling techniques
- Using proper and relevant statistical analysis and
- Safeguarding any bias and random error.
That means you cannot use anything that will inflate your claims or the results. If you represent or advertise that your customers can reduce their debt and save a certain amount of money make sure that it is truthful, objective and is substantiated with relevant proofs.
You must reflect the results accurately to back your claims up so that people can come to know what you have achieved for your previous customers through your various debt relief programs. It is essential that the message regarding your claims is conveyed properly and abides by the law as the FTC looks at such claims from the point of view of the reasonable consumers.
The important requirements
Therefore, while making your claims, what matters most is not the literal accuracy of the words you use, but it is the proof that you provide to support your claims as well as the net impression that the message conveys. This is because when you claim that a past customer has made up to 60% savings, it is likely that a new customer will also want to save that much, if not more. In this case, if you cannot provide a valid proof that the past customer has actually received that much of benefit through your service your claim will be considered as deceptive.
Therefore, there are a few specific requirements for making such claims to make sure that whatever you claim is not deceptive but is truthful. These requirements are:
- Stating that the savings is based on the amount of the debt a customer has while signing up for a specific program
- You should not inflate such savings figures or percentages by adding the fees and interests on the debt that the creditor may add after he or she has signed up for a specific debt relief program through you
- You must not include the impact of your service fees on the savings amount claimed as well
- You must not also inflate the savings amount by excluding the service fees that the customers paid you after they enrolled for such a debt relief program
- When you calculate the results that you have achieved over time you must be honest enough to include all those customers who might have dropped out from the services provided by you or have otherwise failed to complete the specific program they intended
- Make sure that you do not ever base your savings claims only on your current customers or only those who have been successful to complete a debt relief program and
- Lastly, you must include all types of debts enrolled by your customers and not only those that you prefer and have confidence in settling successfully.
Remember, in most of the cases it is found that during calculating the savings claim, a debt relief company tends to exclude the accounts they failed to settle. However, such failures may not have anything to do with your capability because it can be a result of the inability of the customer solely to complete your suggested program and therefore dropped out of your service.
If you study the success rate of the different debt relief companies you will see that it is significantly low and it is not always the fault of the debt relief service company or the drawbacks in their programs.
If you want to make sure that you succeed in the process you will have to care for one specific factor. You will need to screen your customers well and make sure that you enroll only those consumers into your debt settlement service who have the ability to continue with the program and to settle their debts enrolled right away.
To make sure that your customers have the ability to settle their debts right away you simply have to review their current asset strength instead of relying heavily on their future income and limit your service out of necessity. This will save you, your business as well as your customer.