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THE ASSOCIATION OF DEBT SETTLEMENT COMPANIES

THE ASSOCIATION OF DEBT SETTLEMENT COMPANIES. T A S C. TASC’s Summary of Major Concerns with The UDMSA. Definition of Plan Insurance Requirement with No Deductible Registration Requirements do not distinguish between Non-Profit and For-Profit Entities

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THE ASSOCIATION OF DEBT SETTLEMENT COMPANIES

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  1. THE ASSOCIATION OF DEBT SETTLEMENT COMPANIES T A S C

  2. TASC’s Summary of Major Concerns with The UDMSA • Definition of Plan • Insurance Requirement with No Deductible • Registration Requirements do not distinguish between Non-Profit and For-Profit Entities • Bonding not applicable because there is no trust accounts • Fee Structure • Refund of Fees upon Termination

  3. Definition of Plan § 2 (13) • “Plan” means a program or strategy inw hich a provider furnishes debt-management services to an individual and which includes a schedule of payments to be made by or on behalf of the individual and used to pay debts owed by the individual”

  4. Application for Registration § 5(b)(4)(C) • “ ... Am application for registration as a provider must be accompanied by … evidence of insurance in the amount of $250,000… with no deductible

  5. Application for Registration: Required Information § 6 • (7) the applicant’s financial statements, audited by an accountant licensed to conduct audits, for each of the two years immediately preceding the application… • (15) the names and addresses of all employers of each director during the 10 years immediately preceding the application • (17) a statement of the amount of compensation of the applicant’s five most highly compensated employees for each of the three years immediately preceding the application…

  6. Bond Requirement § 13 • Debt Settlement Companies do NOT escrow, handle, or otherwise “touch” on their client’s savings used for settlement purposes. • Bond Requirement is reasonable if there is a trust account involved. • Insurance protects against dishonesty, fraud, theft, and other misconduct which are payable to the individuals and the state

  7. Fee Structure § 17 and 23 • TASC Proposes the following fee structure that would allow debt settlement companies to continue to provide services to Wisconsin consumers: • “If an individual assents to a plan that contemplates that creditors will settle debts for less than the principal amount of the debt, a provider may charge: • (A) a nonrefundable fee for consultation, obtaining a credit report, and/or a set up of the account; • (B) a monthly service fee • (C) a settlement fee. “

  8. Refund of Fees Upon Termination § 26 • Debt Settlement Companies negotiate each account individually and thus may have earned much of the fees upon termination. An equitable solution for termination and TASC proposes the following language: • “If a provider does not hold money on behalf of the a debtor to pay creditors and if a a provider or individual terminates an agreement, the provider shall immediately return to the individual 65% of fees associated with that percentage of the principal amount remaining unsettled at the time of termination.”

  9. Summary • TASC Supports Registration and Regulation. • TASC Members want to continue to provide valuable debt settlement services to Wisconsin Consumers. • TASC Proposes Certain Technical Amendments to The UDMSA.

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