Debt Settlement Industry Rips Off Consumers

Some 250 “debt settlement companies” pray on consumers who are overwhelmed by debts. Consumers are lured by Internet and TV ads promising consumers their debt problems will cease if they just sign up. Typically, the companies require the consumer to make payments to the company while not making payments on their debts. The companies promise that once a pot of money accumulates in the consumer’s account, the company will settle the debts with the creditors by paying a percentage of the debt. In their sales pitches, the companies omit over the fact that they deduct outrageously high fees, that the...

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Why We Need a Consumer Financial Protection Agency

Prof. Elizabeth Warren has been the leading advocate for creation of a Consumer Financial Protection Agency. The proposed new agency is part of the financial reform bill currently being debated in a Senate House conference committee.. Writing on Politico.com, she points out that when lobbyists for the banks announced last year that they would kill the consumer financial protection agency, observers predicted they would succeed given their money and lobbying. But the dire predictions were wrong and the agency is part of the versions of the bill passed by both houses. Of course, the lobbyists have not given up. They...

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Obama’s Proposed Consumer Financial Protection Agency

A few days ago, the White House sent Congress a bill to create a Consumer Financial Protection Agency (CFPA). Everyone who favors consumer protection should support this bill. Georgetown University Law School Professor Adam Levitin argued the case for the creation of the CFPA in the “Credit Slips” blog that covers credit and bankruptcy. He states we need the CFPA because the current regulatory structure doesn’t work and it will almost inevitably cause future crises, if not of the scale of the current one, then still too serious to countenance. Prof Levitin points out that the economic disaster of 2008...

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