But it makes no sense at all
to force a struggling student - loan debtor into an IDR
as an
alternative to bankruptcy relief when it is evident the debtor will never be able
to repay his or her student loans.»
The primary consumer protection problem areas that have given rise
to the States» actions include: (1) unsubstantiated claims of consumer savings; (2) deceptive representations about the length of time necessary
to complete a debt
relief program; (3) misleading or failing
to adequately inform consumers that they will be subject
to continued collection efforts, including lawsuits, and that their account balances will increase due
to extended nonpayment under the program; (4) deceptive disparagement of consumer credit counseling; (5) deceptive disparagement of
bankruptcy as an
alternative for debtors; (6) lack of screening and analysis
to determine suitability of debt
relief programs for individual debtors; (7) the collection of substantial up - front fees so the debt
relief company gains even if it fails
to perform; (8) lack of transparency and information for consumers
as to payment of fees, status of accounts, and communications with creditors; (9) significant delays in active negotiation or engagement with creditors, coupled with prohibitions on direct consumer communications with creditors; and (10), in the case of debt settlement companies, basing savings claims (and settlement fees) not on the original account balance, but on the inflated amount due (including late fees and default rates of interest) at the time of settlement.