Debt Settlement and Collection Agencies: Complementary or At Odds?

Uy:

“Sure consumers owe the debt, but the collection agencies are often violating consumer’s rights and not collecting in compliance with the law. Consumers will receive lawsuits showing that they owe 1,000s of dollars more than they really owe due to an astronomically high amount of interest and fees being added on. A debt settlement attorney will make sure that collection agencies attempt to collect the accurate amount owed and not 1000s extra that is not really owed.” — Golden Financial, quoted from this press release. (And also, everything in between the quotation marks up there is exactly as those guys wrote it. If they want to hire me as a copy editor, I’m easy to find.)

As we wrote on Monday (“Credit Card Debt Collection: The Next Financial Bubble?“), be prepared for stronger scrutiny on credit card accounts you’re collecting. Especially when messages like the one from Golden Financial are floating around out there. I don’t know about you guys, but I’m not entirely crazy about the “You Didn’t Say the Magic Word” style of consumer responsibility.

As Golden Financial asserts in its press release, “However, when consumers hire debt settlement companies or an attorney for debt settlement to represent them, a full A-Z response is sent to the creditor where they must now respond. Creditors have trouble with providing accurate information most of the time, where the lawsuit will often be dismissed and going back to the hands of the collection agency to continue with their collection process.”

If you’re a collection agency, does this align at all with your experience of dealing with consumers signed up in a debt settlement program? And if you’re a debt settlement company — Golden Financial, say — how would you describe your relationship with collection agencies working on behalf of creditors?

Consider the comments section your Thunderdome.