Credit Card Industry Initiative a Disservice to Financially Strapped Consumers

(MADISON, Wis.)— As many American families struggle through difficult financial times and turn to the debt settlement industry for help, the credit card companies continue their attacks against the industry.

The Association of Settlement Companies (TASC) today announced its concern that the credit card industry campaign and its front group, the National Foundation for Credit Counseling (NFCC), will ultimately hurt consumers trying to get back on their financial feet.

“We are here to help people manage their debt and the credit card companies don’t like that,” Chris Kesterson, president of TASC, said. “We have more than $500 million in escrowed settlement funds saved by consumers that are available to the credit card companies to settle these consumers’ debts.”

The NFCC outreach campaign to “educate” consumers about debt settlement is really a negative campaign backed by the credit card industry that demonizes debt settlement and refuses to acknowledge that it is a viable option for those wrestling with debt.

TASC, which was founded to protect consumers, notes that debt settlement works to lower total debt, while credit counseling only works to lower interest rates. Thus, many consumers using credit counseling can make payments for some time and never get ahead, possibly leading to bankruptcy as consumers still cannot afford the high monthly payments that these programs require and fall behind again.

According to a report from Automated Access to Court Electronic Records, bankruptcy filings now exceed 6,000 per day.

The NFCC also touts its members’ non-profit statuses but neglects to mention that credit card companies give monetary contributions to credit counseling companies through pre-arranged agreements. TASC believes this demonstrates a clear conflict of interest, as the credit counseling industry cannot act as a true advocate for the consumer when a bulk of its compensation is derived from the credit card issuers themselves.

TASC works with state governments to regulate standards for debt settlement services through fair legislation and regulation. One of the goals of these efforts is the ability for consumers to differentiate between certified, reputable companies and questionable organizations. Consumers looking for reputable debt settlement companies should visit www.tascsite.org for a list.

About The Association of Settlement Companies
The Association of Settlement Companies (TASC) promotes fair business practices, consumer protection and industry standards for the debt settlement industry. TASC, founded in 2005, serves to protect consumers through an organization seal that represents best practices and standards of reputable companies. The organization also protects its member companies through lobbying efforts at the state and national levels, as well as awareness initiatives to educate consumers on debt settlement as a financial solution. All TASC member companies pledge compliance to strict association bylaws governing business practices and ethics. For more information, visit www.tascsite.org.