American Fair Credit Council Announces Add-On Product Policy

Standard Further Infuses Consumer Protection into Relationship Between Debt Settlement Companies and Clients

FORT LAUDERDALE, Fla.–(BUSINESS WIRE)–The American Fair Credit Council (AFCC) today announced new standards on third-party products and services for all member companies, ensuring that optional products offered to consumers during and after enrollment into debt settlement programs are both directly related to improving their debt settlement experience and are from an independent provider that is unaffiliated with the debt settlement company with which the consumer has enrolled.

“Today’s announcement is a positive development for consumers, the debt settlement industry, and all AFCC member companies,” said AFCC CEO Denise Dunckel. “These new standards, in addition to our existing accreditation standards, represent a broad consumer protection framework that ensures client success in debt settlement programs.”

These sweeping changes, which extend far beyond the Federal Trade Commission regulations in place that regulate the industry, are a marked shift for any consumer considering debt settlement services or currently enrolled in a debt settlement program. The restrictions include:

  • Companies can offer third-party products and services at enrollment only if they provide a significant client benefit directly related to their experience in the program.
  • A debt settlement company cannot charge any fee or receive any compensation for products or services offered to an applicant at the time of enrollment.
  • It must be clear that enrolling in a third-party product is entirely voluntary, and any costs/fees to the consumer must be clearly identified in writing. The consumer should understand that enrollment in the program is not contingent on purchasing a third-party product/service.
  • The third-party provider must be independent and cannot be affiliated in any way with the debt settlement company offering that service or product.

Debt settlement companies offer relief directly to consumers by allowing individuals – who typically owe more than $25,000 in unsecured debt – to partner with a provider of their choosing, who negotiates, on their behalf, with their creditors, to lower the amount owed. Debt settlement has proven to be an invaluable service for select consumers who would benefit through a program – independent analyses show that 98 percent of offered settlements result in a decrease of the client’s debt that is greater than the accompanying fees and, for each $1.00 in charged fees, the consumer receives $2.64 in savings.

About the American Fair Credit Council

The American Fair Credit Council (AFCC) is the national association of professional debt settlement companies. The AFCC and its member companies work on behalf of consumers struggling with overwhelming burdens of unsecured debt to settle those debts for less than their full balance. The AFCC has developed a strict Code of Conduct centered on “best practices” designed to protect the rights of consumers and requires member companies to follow stringent regulatory guidelines for operation. All AFCC members operate on a “No Advance Fee Model” and never charge a fee for services until a consumer’s debt has been successfully negotiated.


Denise Dunckel