New Dawn for Americans in Debt

For the past two years, countless Americans have struggled financially as the country fell into the icy grip of a pandemic that has yet to entirely subside. Unfortunately, there are few options available to these consumers when they slip down the slick slope into debt. One sector that has remained steadfast in its offerings — and its willingness to help consumers during their darkest financial moments — is the debt settlement industry.

For decades, debt settlement companies have worked directly with consumers to negotiate with their creditors and reduce their unsecured debt. Debt settlement companies have provided billions in savings to indebted Americans, with $1.65 billion in net consumer savings delivered in 2019 alone.

And now, new and sweeping changes are coming that will provide further significant consumer protections to thousands of Americans who are considering a debt settlement provider or those simply grappling with ways to relieve their debt.

Like many financial services providers, debt settlement companies operate under strict regulatory rules, specifically from the Federal Trade Commission and state regulations in states that enforce their own regulatory regimes. These regulations, on top of the robust accreditation standards of the American Fair Credit Council, ensure that a debt settlement provider cannot charge a client for any of its services until the provider negotiates a settlement with their creditor, the client accepts that settlement and makes a payment towards it.

However, at the AFCC, we recognize that more can and should be done for those of us who are in an incredibly delicate financial state, which is why the AFCC is unveiling new, unprecedented and wide-ranging additional consumer protections for all member companies.

Under the new standards, AFCC member companies can only offer third-party products to consumers when they enroll in a debt settlement program if the product provides demonstrable value to the consumer’s debt settlement experience, is completely voluntary and the debt settlement provider accepts no commission or fee from the third-party provider.

In addition, we want to guarantee 100 percent transparency with our clients. Accordingly, every AFCC member company must disclose the costs of any third-party service visibly for consumers, and the third-party provider must be completely unaffiliated with the debt settlement company. Clients must also be clearly informed that signing up for any third-party product is not necessary for the enrollment or completion of their program.

This new policy is just the latest step the debt settlement industry is taking as we continue to consider improvements to consumer protections while our members help Americans to escape from the crushing weight of their unsecured debts through a safe and effective product.

Between the FTC rules and the measures currently in place, AFCC members already deliver $2.64 in savings for every $1.00 in fees paid, while 3 out of 4 clients will have settled at least one account within the first 4-6 months of enrollment.

Debt settlement is about opening new doors and offering choices for Americans who feel like there is nowhere left to turn. Our members are putting the needs of consumers first, ensuring that they have the tools available to protect their wellbeing and return to a state of financial stability.


Denise Dunckel is CEO of the American Fair Credit Council, a nonprofit trade association representing debt settlement professionals that advocates for the rights of consumers who are struggling with the overwhelming burden of debt.

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