WSJ article outlines danger of debt “settlement” companies August 15, 2019 Last week, The Wall Street Journal published an article (may be behind the paywall) entitled “That Offer to Make You Debt-Free? It Can Make You Worse Off.” The piece detailed the unethical practices that the debt-settlement industry uses to “get the consumer’s guard down.” These practices include offering a loan via pre-screened mailer without the intention of actually extending credit. The loan offers were used to entice consumers to sign up for a costly debt settlement program that would ultimately harm the consumer’s financial well-being. Consumers are often told by debt settlement companies to stop paying bills altogether while the company attempts to negotiate a reduction in consumers’ debt. Even if the debt is reduced, the fees and penalties that are accumulated from non-payment, combined with debt-settlement company fees of as much as 25%, can make the process more expensive than bankruptcy and certainly more expensive than working directly with a creditor. AFSA, consumer-advocacy organizations, and federal regulators, such as the Consumer Financial Protection Bureau and the Federal Trade Commission, have expressed concerns about the schemes presented as solutions by debt settlement companies. AFSA continues to work with and educate policymakers on the need for additional rules of the road in the debt settlement space.