Debt has been around a long time, as has the act of forgiving debts, wrote David Graber in “Debt: The First 5,000 Years” (Melville House) published in July 2011. That he also had something to do with inspiring the Occupy Wall Street movement isn’t surprising – he’s a confirmed anarchist.
That’s about as far from Contemporary Literature as you can get. Yet here’s the rub: thousands of people have joined the fray to wade out of a sea of neck-deep debt by doing just the opposite of the seemingly purposeless Occupy movements.
They organize. They have clearly defined goals. And they survive with a little help from their friends. Now that’s about as close to literature of a contemporary nature as you will ever get. It’s the stuff of which heroic stories are made, whether real or fiction. After all, the current economic crisis ranks among the biggest stories since The Great Depression and, because of the severe drought conditions in much of the country, evokes images reminiscent of John Steinbeck’s “The Grapes of Wrath.”
One such true story revolves around a woman who personifies “America Inspired” with an unmatched passion for helping people bail out of debt. She’s Aileene Tantiongloc, who figuratively as national heroine is rapidly becoming the Joan of Arc of our modern Debt Age with hundreds of staunch followers. While politicians argue about reducing national debt, and get nowhere, Tantiongloc spends her days reducing debt one person at a time. She and the folks she works with have slashed more than a $1 billion off consumer debt, much of it owed to bank-owned credit cards. Remember banks? The government bailed them out. Tantiongloc does the same thing for people.
Her passion for helping others is borne out of life’s experiences. She used to sell mortgages. But in recent years she’s dedicated her new life to making other lives better for people who’ve been caught between a rock and a hard place – no jobs, credit card debt they can no longer manage – some on the brink of joining the homeless. Tantiongloc pulls them back from the edge of financial oblivion with encouraging words and a helping hand.
“I have been in the accounting field for over 20 years and worked as a Controller for 15 years,” she said with a twinkle of modesty. “I was the top salesperson for three years in a mortgage company and three years at Freedom Debt Relief.”
Freedom, of course, is the largest debt resolution company in the country, with tons of awards and citations as the best place to work. Founded in 2002, the company boasts teams of negotiators, counselors, and other experts who daily deal with credit card companies head-on. Like Tantiongloc, many switched professions to help those in need. But to hear some of Tantiongloc’s 600 co-workers talk, you’d expect to see some kind of Joan of Arc glow hovering over her. They say she’s an effective negotiator, a motivator, and does everything well but walk on water. Mostly, she applies what she’s learned from her own life, her co-workers say. Freedom works out of two primary offices in San Mateo, Calif. and Phoenix, Ariz., but clients always seem to know where Tantiongloc is coming from – the heart. The Internet allows her into homes nationwide.
“We have served about 150,000 clients and settled over $1.29 billion in consumer debt and saved our clients more money than any other debt resolution company in America,” said Tantiongloc. Is what Tantiongloc does a free service? Absolutely not! In the spirit of the American free enterprise system, hundreds pay for having their debts slashed. Freedom puts it this way in a footnote to one of its websites: “Clients who make all their monthly program payments pay approximately 50 percent of their enrolled balance before fees, or 71 percent including fees, over 24 to 48 months.” (Copyright©Freedom Debt Relief)
Tantiongloc has no shortage of potential clients. Credit cards account for about 98 percent of $793 billion in revolving debt in the United States, according to the Federal Reserve, and average credit card debt per household exceeds $15,000. Accordingly, Tantiongloc occasionally finds herself flooded with referrals. “It’s her personal touch that keeps them coming,” speculated one client recently.
Of the many painful ways to bail out of credit card debt, the three primary avenues are to make minimum payments, credit counseling that can lead to a debt management plan, and debt settlement programs like Freedom. One way or another, whatever you do will be tracked on your credit report. Examiner’s credit repair expert is Garr Russell, founder of a Grand Rapids, Mich.-credit repair company (Examiner).
Many “non-profit” counseling services were supported by banks as an alternative to losing debt collections through bankruptcy, sources at the Federal Trade Commission report.
When Congress legislated the Bureau of Consumer Financial Protection within the FTC, changes in the rules governing credit resolution popped into being rapidly, apparently whittling the numbers of such operations from more than 1,000 firms to possibly a mere 150 companies.
In the trade what had been called the Association of Settlement Companies disappeared and re-emerged in June 2011 as the American Fair Credit Council. Basically the re-born association embraced new and tougher government rules. A month later, other reactions to the tougher FTC rules were evident. According to John C. Linfield, Interim Director of Certifications at the Center for Financial Certifications in South Portland, Maine, where you can take a series of courses to gain a certification to help people for a fee of $400, the new FTC rules were incorporated into the courses.
Now that settlement companies conform to the newer FTC rules, the number of inevitable complaints visible on the Internet about such companies has dwindled. Most complaints are dated before the Bureau of Consumer Financial Protection was born. In fact, the complaints are one of the reasons Congress created the agency. Cautions the FTC: “But there is no guarantee that debt settlement companies can persuade a credit card company to accept partial payment of a legitimate debt.” Tantiongloc points to her track record; “We’ve settled more than $1.29 billion.” She implies the results speak for themselves.
Examiner asked a lot of questions and created a hypothetical case for John Doe to test Freedom’s purported methodology. We gave John Doe a hypothetical $47,647 in credit card debt, a monthly income of $4,242 from Social Security and a church pension, and figured what it would cost over 30 years of minimum payments — $87,366. The difference for John Doe; his fees to Freedom could reach $10,000 over the 46 months that lie ahead. That’s a lot less than the $87,366 the banks would get, and in only 3 years and 8 months versus 30 years with the banks.
So how does one avoid rip-off artists in the debt reduction field? How do you land in the passionately helpful hands of someone like Aileene Tantiongloc and not elsewhere?
Examiner asked Andrew Housser, co-founder of Freedom and a member of the executive board of American Fair Credit Council how to tell the good guys from the not-so-good guys. This was his reply: “Peter, the numbers have been decreasing substantially since the FTC Rule went into. At peak, our industry had as many as 1,000 companies (this included lead generators, sales and marketing brokers as well as service providers). I believe the number is closer to 150 now. Members of the AFCC must adhere to our code of conduct, which requires, among other things, that the members comply with the FTC debt relief rules, including the Advance Fee Ban.
“Some companies outside of our association have tried to find exemptions or loopholes to the FTC Rules in order to continue charging advance fees, and these are the companies that consumers looking for help need to avoid. The good news is it is very easy to figure out who is and who is not complying with the Advance Fee Ban. Typically a single call to ask questions about the fee structure is all you need. Make sure to review the agreement before you sign up as well. Any company that charges you any fee for any reason before actually resolving a debt for you is probably one of the “loopholers” and should be viewed with suspicion.”
The New York Times review of David Graber’s “Debt: The First 5,000 Years” by Thomas Meaney, an editor of The Utopian: “Whatever becomes of the Occupy movements, the politics of debt are now our politics. While politicians argue over how to unwind our liabilities, Graeber uses his reading of the historical and ethnographic record to imagine a world where such liabilities might be forgiven altogether.”
That would put Aileene Tantiongloc out of business and cost banks and the economy $793 billion. With apologies to author Graeber, Examiner imagines that total forgiveness is not likely. But if you’d like a referral to Tantiongloc, leave your name and contact in Comments below, and Examiner will put it forward early in 2012 — she’s on vacation.