Debt Settlement Firms Outfox the Regulators
They affiliate with attorneys to skirt new restrictions on fees
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Debt settlement companies—which promise to negotiate with creditors on behalf of strapped consumers—are switching tactics to skirt new consumer protection rules.
The debt settlement business has boomed in recent years as more Americans find themselves unable to keep up with credit-card balances and other loans. The number of debt settlement firms grew tenfold, to about 1,000 in 2010, from 100 or so in 2007, according to estimates by Andrew Housser, an executive board member at the American Fair Credit Council, an industry lobbying group.