The @GetOutofDebtGuy over at Credit, Debt, Life did a nice review of the Florida Attorney General’s efforts to change how debt settlement folks get paid. His letter to the FTC encourages the FTC to require debt settlement companies to only collect fees after services are provided.

Unlike credit counseling programs where consumers continue to make payments to their creditors, debt settlement services encourage the consumer to stop making payments. These moneys that would normally be paid to creditors are often reduced and then paid to the debt settlement company. These companies then negotiate settlements with each of the consumer’s creditors.

The Florida Attorney General along with the Attorneys General from Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, and Wyoming sent a letter to the FTC citing the following problems with debt settlement practices:

“The States’ enforcement actions provide ample evidence of the types of unfair and deceptive practices that financially distressed consumers encounter when they seek credit solutions via debt relief services. 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.”

Debt settlement folks, what do you think? Is it time to clean up the industry or is this an over-reaction to a few bad apples?

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Twitter is a swiftly growing phenomenon. It is full of people chattering back and forth about their daily lives and nuance. Many think it is another growing distraction and waste of time on the Internet.

I tend to agree, but those characteristics also give it some interesting possibilities for generating Internet debt leads. And here are some simple tools that allow you to give it a try.

1. Twitter.com - At the most basic level you need to have a Twitter account. I recommend this simply be a personal account, ideally with some simple version of your name as the user name. This will enable you to use the rest of the tools and engage potential prospects on Twitter.

2. TweetGrid - The primary way you will be looking for debt leads is to search for triggering terms and conversations that may indicate a customer looking for help. You can simply create multiple queries in TweetGrid to monitor for these specific keywords. TweetGrid also makes it easy to engage if someone asks for help or more information about debt settlement or relief.

3. HootSuite.com - This is a great little tool that allows for you to schedule future Tweets. The smart Twitter user understands that people in trouble with debt and on Twitter will go looking for experts. This is where this tool comes into play. Make sure you are loading up and regularly scheduling helpful Tweets about debt relief. This will help draw in a good audience of prospective customers.

4. Seesmic Desktop or TweetDeck - Keeping all of this organized requires a good command center. Try one of these. They will let you manage multiple conversations, searches, and even Twitter accounts. These tools make it easy for you to directly engage prospects on Twitter and keep track of the various conversations.

Twitter is still emerging and evolving as a real-time Internet channel. And there is definite promise for significant lead generation opportunity in the future. Learning to harvest this marketing channel now will certainly pay off in the future.

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The FTC hosted a public forum on November 4, 2009 to discuss a proposed “advance fee ban” and continued tightening on “disclosures and misrepresentations” related to the debt settlement industry.

The meeting was certainly packed with all of the major players in the debt settlement industry from practitioners to industry advocacy groups, like TASC. However, also present were a cadre of Attorneys General from various States and representative of the Credit Counseling industry sitting in support of these new proposed FTC provisions.

Just prior to the meeting industry advocates were making their case to the press.

Credit Solutions one of the leading debt settlement companies in the market and a charter policy partner of the United States Organization for Bankruptcy Alternatives (USOBA) made the case that the FTC should not pursue an all out ban on advance fees, but rather apply additional restrictions. Their argument, laid out in this press release, is that an out-right ban would force 84% of debt settlement businesses to close. However, adding additional restrictions in line with the Uniform Debt Management Services Act (UDMSA), which they support would clean-up the industry without reducing options for consumers in trouble with their debt.

Meanwhile, The Association of Settlement Companies made a similar plea in their press release:

“Debt settlement has been and should remain an option for the tens of thousands of consumers who are facing financial difficulties,” Dave Leuthold, Executive Director of TASC, said. “Especially in this tough economic climate, consumers should have more financial tools at their disposal, not fewer.”

The FTC is reporting that results and transcripts from the meeting should be available within the next month. It will be interesting to review the discussion.

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If you are in the debt management or settlement business I urge you to take a look at an interesting source for debt ideas. There is a growing population of bloggers that are blogging about how they are or did get out of debt.

I think this presents a few interesting opportunities for someone in the debt business:

1. Creative debt strategies - These are generally do-it-yourself debt survivors. They are learning by trial and error and documenting every success and failure online. I have seen everything from genius to idiotic–both are important extremes to have in your debt expert tool bag.

2. Inspirational stories for debt customers - Some of these make great inspiration for you own clients. Think of creative ways you can package (no plagiarism or copyright violations please) these experiences and present them to your clients. Using with proper attribution short clips, quotes, or even inquiring with the blogger to re-print an article can make for great marketing material.

3. Smart way to enhance your own Web strategy - Ever thought about maintaining your own blog or Web articles cataloging and chronicling your debt settlement case studies. Generalizing scenarios and work-outs that you do on a daily basis can make more great marketing material.

Remember debt customer are looking for hope before anything else. These great blogs and bloggers can help seed that inspiration for your help to be better received.

Here are a few bloggers I follow:

• Debt Kid
• Get Rich Slowly
• How I got out of $26,000 of debt before getting married?
• ZenHabits

1. Start at the subject line. It all starts at the beginning-the subject line. Studies show that most read nothing else before trashing a large percentage of their emails. You need to prevent that early demise for your email. A few simple tricks can help get that brief pause at your email and open.

• Use their name
• Avoid finance and deal words (mortgage, debt, rates, payment)
• Forward or reply to past email (Fwd: and Re: subject lines get opened)

2. Keep it short. Everyone, even your grandmother’s, email box is overflowing. If you want action you need to keep your email to only a couple of lines. This also makes it look less like marketing and more like a personal note. Maybe something like this…

“I am sure I can help you with your debt. Give me a call.”

You will probably be shocked at how that simple one line email converts

3. Get right to the point. This sort of goes with number 2. Don’t waste time introducing yourself and telling them how trustworthy you are…most don’t care and the rest won’t read it.

So, tell them what you can offer and how it will advantage them. That’s all. Really, that’s it. Everything else is simply reducing your chance for success.

4. Tell them why it is important to respond. I see way to many emails that are all about the sender and nothing about the recipient. Why then would they respond. You need to start and end every email about the client. Why they may need your debt settlement help and maybe an examples of how you have already helped someone.

5. Add the name of a friend. This is a biggie. If you have helped one of their friends or this was a referral, don’t leave that out. A simple, “Susan suggested I drop you an email.” Guaranteed open and read–probably a reply. This can be a little sensitive in matters of debt counseling, but kept short and sweet it is a confidence builder for the client to reply.

6. Tell them what to do. This should be number 1. You can write a great subject line, brief and to the point email, but if you forget to tell them what you want them to do next you will lose them.

This is a human behavior thing. The first reaction is to scan and discard. However, if you close with a simple clear instruction–”Call me at 555-1212.”–it is very likely to happen. However, if you end with “hope to hear from you” or leave your contact information in the email signature box you have created just enough resistance to lose.

Are you looking for free debt settlement leads? If you find any let me know, but aged debt settlement leads are pretty close. At pennies on the dollar you can get high quality Internet generated debt inquiries.

That’s right, instead of buying arbitrary names and addresses for direct mail you can get leads that asked to be called. Do you want to learn a little more about the aged debt leads business?

Internet Leads

Most aged debt leads are originally sourced through the Internet. They are real people making inquiries, via web forms to various online marketing offers. This simple fact already makes them a very valuable sales leads because at some point they were motivated to provide their personal data–name, phone number, and email.

Obviously conditions can change for the customer and they may get the debt relief they need. However, in most cases (as statistics continue to show) over 65% of Internet leads never get contacted. That means there is a pretty good chance those cheap aged debt leads are still waiting for a call-back.

Scrubbed for Data Integrity

The other nice thing about aged debt leads is they are typically quality controlled. A good aged debt lead provider will carefully scrub aged leads they acquire for good phone numbers and email addresses. Unlike your average real-time lead an aged lead has time to be reviewed for obvious fake data.

Proven Effective

Most importantly these aged debt leads have been proven effective. Maybe just as effective as real-time Internet leads. After all the difference between 3% and 1% (or even less) conversion is quickly wiped out by the savings you get buying aged data.

What’s even more amazing about the aged debt settlement lead opportunities is that nurtured over time many will eventually convert. Debt clients are notoriously cautious and nervous about debt relief offers. Given the time to build trust and provide valuable email education you will see many come to you for help.

So, they are not quite free, but given your conversion profits and the cheap debt lead price–they are very likely to be free debt leads in the end!

I know from my clients that loan modifications are still a booming business. And one of the most critical components is understanding a borrowers debt-to-income ratio. More simply how much “qualifying” debt are they paying every month compared to their monthly income?

This apparently simple calculation can get very complex.

Are we talking about front-end DTI or back-end DTI? Does alimony and child support count? How is it calculated if you are self-employed? How does home equity loans or credit line impact this ratio?

These are just a few of the important questions that are plaguing your loan modification clients. To help you build a good loan modification sales script and tools for this customer base went looking into my archives and on other smart websites and this is what I found:

• My own authoritative post on loan modification DTI calculations
• A great article by the author of Loan Modification for Dummies, Ralph Roberts
• A really good video on how to calculate DTI for a loan modification

I hope this helps you and your loan modification customers. This is the centerpiece of qualifying most of your loan modification clients.

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Phone skills and sales scripts can be a huge advantage in any sales discipline. However, there are few industries that I can think of where these skills and scripts are AS IMPORTANT as they are in the debt business. Breaking through the threshold of resistance for a customer response is no great than in a debt client. These consumers are beaten, bruised, and battered by fast talking scams, crooks, and collectors. The ring of the phone makes them shrink and cringe with anxiety.

That means you need to keep your skills sharp and continually look for opportunities to change up you game. Review other techniques. Here are some resources to review for new ideas:

• DebtSkinny.com - This is a great site with lots of Debt Relief resources and guides. In particular, I like these simple and straightforward voicemail scripts.
• MSTARS Debt Settlement Training - I have never personally tried these guys, but they seem to be one of only a few that specialize in debt settlement specific sales training.
• LeadCloser.com - This is a relatively new lead related blog, but has some good advice on debt sales scripts.
• Aged Lead Strategies - Yours truly has some ideas on some effective approaches to creating debt settlement sales scripts.

Whether you use these or find some sales scripts resources of your own, you should always be looking to freshen up your sales approach. Scripts can help you test new approaches in a disciplined and consistent way. Making it clearer to see what is and isn’t working in your sales process.

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I am continually amazed by the innovation of customers. Some of the most creative are those that buy aged mortgage data. These buyers are a diverse bunch. I thought it might be interesting to you to see who some of these buyers are and why they buy aged mortgage leads, versus a more specific lead type.

Mortgage Refinance

This is certainly the most obvious of the aged mortgage data buyers. These are folks that are looking for two scenarios:

• Borrowers who might qualify under new loan programs
• Borrowers who might be enticed by a changing mortgage rate environment

In addition to these very specific scenarios there are many aged mortgage leads that are simply not contacted. Really efficient mortgage loan officers and businesses are aggressively scooping up these bargains and turning them into bigger margins.

Loan Modification Leads

This is another big use of aged mortgage data. These leads are being used to identify potential candidates for loan modifications. Many times declined mortgage refinance borrowers are prime candidates for the variety of loan modification programs on the market. Unfortunately, instead of being referred to a qualified or licensed loan modification specialist they are simple turned down. Even worse many of they abandoned mortgage leads or borrowers don’t even know about loan modifications. Making it unlikely that they would apply as a loan modification web lead.

Real Estate Leads

More than one real estate agent or broker has jumped in front of mortgage brokers by grabbing and building a database of aged mortgage leads. Often real estate shoppers with start their buying process by doing some mortgage rate and qualification shopping. Often this results in mortgage brokers dropping these leads on the floor until they are closer to a home buying decision. What better lead could a real estate broker get?

Debt Leads

Like the mortgage refinance and the loan modification lead buyers, debt businesses find gold in the mountain of discarded or uncontacted aged mortgage leads. Often these mortgage refinance leads were made in hopes of doing a cash-out refinance to relieve some debt burden. For so many years homeowners have been taught to use their home equity to solve this problem. However, with the new conservative market there is little opportunity to do it that way anymore. Big opportunities for debt settlement companies in these leads.

Database Marketing

Finally and probably one of the most effective uses I have seen for aged mortgage data is to populate database marketing campaigns. Many times these leads will return value over the long-haul, especially if you consistently market to them.

Adding them into your traditional email marketing and direct mail marketing lists can give you the extra scale you need to be successful.

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Aged debt leads can be one of the most profitable and productive parts of your debt settlement business. Maximizing your prospective sales opportunities is half the battle in the debt business. The very nature of debt settlement implies that it is going to be difficult to help many of the people you contact.

This is why it is so critical to find a consistent flow of debt leads. Aged debt leads can be that steady flow without breaking tight marketing budgets.

But don’t they require a lot more effort? Not really. Here are 5 secrets to getting more with less from your aged debt leads.

1. Start with email. The best way to be efficient with your time and money is to spend less money and less time. Since aged debt leads are so affordable it is easy to buy a lot more for less. With less invested you can be a little less aggressive in turning every lead into a sale. That means that starting with email and not power dialing can be a very effective way to quickly flush out bright spots in your latest aged debt lead buy.

2. Give it a second try. Chances are your aged debt leads are already 30+ days from the initial inquiry so no need to jump on the phone just yet. Give it a day and hit them with a second email, referencing your first. This will quickly sort out bad email addresses and rattle the cages of those that are still actively seeking debt relief.

3. Call once. Now put on your headset and start calling. You emails have helped you sort the list and warm up the prospects. When you call and say your name and business you will get an, “ah ha!” response. Without those initial emails most of these customers are going to have a tendency to give strange voices the immediate hang-up. Remember they are probably being hounded by debt collectors.

4. Put them on ice. Okay, you have emailed and called. If you aren’t getting any response it is time to put them back on ice. Chances are, once you have removed all your disconnects and email bounces, you have a good clean list that has found some temporary relief. Unfortunately, that is often all it is. So, give the list a rest and move them into a lead nurturing phase.

5. Get them on a steady drip. Have ready a steady stream of non-sales, education emails at the ready. This is the best way to (with little or no effort) strengthen the trust and credibility you have with this new list of prospective debt settlement customers. Get them queued up and continually pass new aged debt leads into this growing list. In no time you will be kicking out a good number of your own leads from this steady in-house email marketing campaign.
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