For years now I’ve written about debt relief companies that have used the personal loan mailers as a way to make the phone ring and then sell them some sort of debt settlement, debt relief, or modification service.

Commissioned or otherwise incentivized salespeople get those leads and then attempt to close the sale or manipulate the desperate and struggling consumer into purchasing the service.

I recently received the following guest post from a former salesperson from inside one of these companies. If you want to send me a guest post as well, click here.

Here is what our former debt relief salesperson sent me.

I Was a Bait-and-Switch Debt Salesman

In 2018, I took a sales job with a financial services company. This company seemed to have it all: an award-winning workplace culture, a decent base salary with uncapped commissions, and most prominently, a mission – to help Americans burdened with credit card debt.

I had never worked in finance before. This would be my first sales position. When I got the offer, I was ecstatic. I showed up on my first day eager to learn. I knew the company helped people resolve overwhelming debt, but I wasn’t sure how.

Training

My first two weeks were dedicated to training.

I, and several other prospective salespeople, were given a crash course in some finance basics: what a FICO score was and how to pull it, Chapter 7 and Chapter 13 bankruptcy, the three major credit bureaus, different forms of debt consolidation, and one particularly relevant factoid – the current amount of consumer debt Americans owed numbered in the hundreds of billions.

I remember our trainer, a pale, bearded, plaid-wearer affecting a couldn’t-hurt-a-fly nice guy routine, circled that last, mind-boggling figure with his dry-erase marker and wrote one word next to it – “opportunity.”

Scripts

This was a sell-by-phone business. We were all given a standard script from which to read.

We talked about tone, handholding, temperature checks, and maintaining a steady series of impressions with a potential client as we led them through our sales pipeline. One of our trainers, a graying version of the doe-eyed football player archetype from any high school movie made in the ‘70s, imparted upon us his favorite sales phrase – “How does that sound?”

A way to both reassure our clients of our attentiveness and to periodically gauge their level of buy-in. Gauging interest would prove to be important later.

During the sales training, one thing I immediately found odd was that we were to refer to ourselves as “financial consultants” when introducing ourselves to clients, and never “salesmen.” It wasn’t enough to give me pause, and I didn’t think about it.

What Were We Selling?

But what were we actually selling? The short answer was pretty simple: credit card modification.

Our job was to convince potential clients to enroll in the company’s “modification” program, a program that promised to lower the total amount of debt they owed and reduce their interest rate to 0%.

The entirety of how our performance would be evaluated depended on how many deals we made with clients. We were to sell these people that this plan was their best option, and tell them point-blank if need be that it was certainly better than bankruptcy.

Credit card modification itself seemed pretty straightforward too. The program, as it was explained to me, involved the client ceasing to pay their creditors, and instead accruing funds with our company, set aside in an FDIC-insured bank account.

After about 6-7 months of accrual, minus whatever fees our company charged, our legal team would represent the client in a negotiation with their creditors using the accrued funds as leverage. This negotiation would cancel the interest on their debt and reduce the overall amount.

Part of our pitch was a “performance guarantee” of 35%, such that if we didn’t lower the principal by at least 35%, we would not collect the entirety of our fees. At the time, none of this seemed like cause for concern.

How the Process Worked

Our trainers explained to us how the entire process worked:

1. The company bought leads, the contact information, and credit scores of people with debt, from the credit bureaus.
2. Our marketing partners reached out to these leads with flyers, emails, and phone calls informing them they had pre-qualified for a debt consolidation loan, a loan that would put all their lines of credit into one loan at a lower interest rate.
3. Our leads would apply for the consolidation loan, and enter our database.
4. Each salesperson would be assigned a given number of leads to call each day.
5. Our job was to call/email these people, give them our best pitch, and convince them to sign up for the credit card modification program instead.

Doubts

At this point, some of the more experienced members of my sales cohort started having doubts. Why did the intake process involve a debt consolidation loan, when we were to sell this credit card modification program instead?

The words “bait-and-switch” started getting tossed around at after-work drink outings. But most of us were just excited to have found employment. This excitement overwhelmed whatever small misgivings we thought we had, and we started work determined to prove ourselves.

Things started making a little more sense to me once I understood the sale. It went something like this:

My Sales Day

Every day, I would receive 2-5 leads – names, with phone numbers and emails to reach out to.

I would make contact, and introduce myself as the financial consultant assigned to their case.

I was instructed not to say I worked for the company that hired me, but rather, something else.

Instead of giving the name of the company which had its name on the building directory, I would say I worked for “Debt Solvers LLC” instead (This name is fictitious and an example to use in my post). According to my trainers, “Debt Solvers LLC” was a subsidiary owned by our parent company, and there was no ethical violation in keeping things limited to the more focused smaller agency.

After making contact, I would undergo the “QC,” a quality check call. During this call, I would ask general questions about the client’s financial situation. I would jot down notes in their file regarding how much they spent on groceries, power, car bills, and other monthly spending habits.

I would get an estimate of how much take-home income they made each month. And most importantly, I would ask for their Social Security number and date of birth, key pieces of information I needed to do a soft pull on their credit. I’d let them know I needed to conduct a soft credit pull and would call them back after looking over their information.

Pulling Credit Reports

Soft credit pull. Running their name, date of birth, and SS# through Experian, Equifax, or Transunion, I would get a more detailed look at their existing lines of credit, how much they owed and to which creditors. I would also get their most recent FICO credit score.
“DQ.”

I would then call the client back and confirm what I was seeing on their credit report. I’d ask them how they accrued $10,000 on their Discover card for example.

Not Approve Them for Loan

And then I would disqualify them for the debt consolidation loan, explaining that we appreciated their application, but that their credit score was too low, or their debt to income ratio was too high. (The majority of times this would be the case.

Almost nobody actually qualified for the loan. Over 95% of applicants had either credit scores that were too low or Debt to Income ratios were too high.)

The Actual Pitch

After disqualifying them came the actual pitch. I would inform them that though they were disqualified from the loan, they did qualify for something even better — our credit card modification plan.

I would read through the sales script provided, with whatever tweaks I wanted to make to it, and then try and convince them to enroll.

If all of that seems convoluted, that’s because it is. Honestly, when I first started, half of what I was reading from the page felt unintelligible to me. It took weeks of cold-calling and being in the office before I even began to have an inkling of what was actually going on.

Once the Consumer Agreed to the Alternative

When a client decided to sign onto the plan, a few things would happen.

First, we would select the terms of payment and how many months. I’m going to give a rough, inaccurate example here.

Say a client-owned $36,000 in unsecured credit card debt. Our 35% performance guarantee meant that our new principal estimate would be $23,400. We would then choose whether to pay this $23,400 over a certain number of months, i.e. 24 months, 36 months, 48 months, and divide the monthly cost accordingly. Say the client picked a 36-month plan, they would pay us $23,400/36 = $650 a month instead of their creditors.

We would always be sure to mention that all of our built-in fees were included in this $650, including our company flat percentage fee for our company and an attorney’s fee for the lawyers we provided to represent them to their creditors.

Face-to-Face Meeting

Then, we would set up a time for a face-to-face meeting with our notary service. The company employed a mobile notary service that sent notaries out to meet clients in a physical setting, bringing with them a legal contract generated by us.

The notary would have little to no knowledge of what we were actually selling, but they would run through a boilerplate presentation of their own to the client before collecting an in-person signature.

Never See You Again

Once the payment plan and face-to-face appointment were scheduled, it was onto the compliance call and goodbye. The last thing I was instructed to say to every client was “I will be your financial advisor and with you every step of the way.” I would then never speak to these clients again.

Red Flags

Back then, all these details seemed impertinent, mundane, boring. Just part of my job, part of the learning curve. But people talked at work.

And there were red flags that became more and more obvious, redder and redder as time went by. It didn’t take long for me to realize there was something nefarious going on, but reaching a comprehensive grasp on what it was, took me a few months of selling.

For one thing, advising our clients to cease paying their credit cards and pay us instead seemed sketchy. And it was. That would destroy our clients’ credit. This is why many salespeople on the floor found it easier to pitch people with low credit scores. Those 500s, 600s, 650s had much less to lose, and wouldn’t mind a credit dip.

Fees

The fees didn’t seem right. I couldn’t help doing some reading in my own time, and I found various sources online that warned those in debt management programs that companies that charged fees upfront without getting results first ought not to be trusted, or at least scrutinized.

The fact that we would lure these people in with marketing talking about a consolidation loan, and then put a “financial consultant” salesperson on the phone with them to sell them something else didn’t seem right.

That Was Bait and Switch

That was bait-and-switch, cut and dried. I sat there hundreds of times saying “I am the financial consultant assigned to your file” thinking I had absolutely no education, no formal qualification to advise anyone about their personal finances.

And here I would go digging around about their grocery budget before pulling their credit and selling them on “credit card modification.” And if I, college-educated with a master’s degree, felt like I wasn’t qualified, I knew some of the other sales guys around me had barely gotten through high school.

And then there was “modification” itself. Our entire service was basically to starve out our clients’ creditors, and then renegotiate with them six to seven months down the line while extracting fees from our clients’ bank accounts in the meantime.

Only, I heard rumors from those in the Negotiations department about how little debt was actually negotiated away, how impossible it was to get companies like Bank of America or Citi to work with us.

I had a suspicion there was hardly any negotiating going on at all, that the entire department was just a prop to make this company look like it was providing a legitimate service.

It was known Negotiations detested Sales. I knew sales guys who would say anything to get these people to enroll and have Negotiations deal with their confusion later.

Legal Services

Then there was the whole litigation aspect. The company had a Litigation department specifically to help clients going through legal troubles. And how could they not?

Months of not paying creditors usually resulted in the client getting sued.

Our sales script would warn them about this outcome, but we would always qualify it by saying this was an extremely rare occurrence, and less than 1% of our clients would actually have to go to court. I doubt that was true.

Looking at the people the Litigation and Negotiation departments employed…those were not lawyers. They were associates and bachelor degree holders at best. The ones I encountered considered themselves support staff. This was just some office job they had managed to find on Indeed, not a legal career.

The prevailing culture that I saw was one unaware or unconcerned about the severity of any potential legal repercussions we were subjecting our clients to.

Selling Debt Settlement

It was only later on that I learned what we were actually selling was called “debt settlement.” It’s when a debtor approaches their creditors to settle their debt down to a new principal.

Only, I wasn’t so sure my company was doing any real negotiating at all. If anything, the Negotiation and Litigation departments seemed a formality.

Fake Reviews

There was also the issue of review-bombing. Though our company had won awards from reputable magazines declaring we had one of the best work cultures and employee benefits in the city, a closer look at Glassdoor suggested otherwise.

Though it maintained a solid 4.0 star rating on the review site, peppered throughout were 1 and 2-star reviews, written by bitter former employees. Ex-sales people who felt cheated out of promises of huge commissions. Support staff complaining about pay discrepancy and neglect.

Some reviews outright claimed the company was fraudulent, not helping anyone manage debt but rather preying upon them.

Those negative reviews weren’t just reserved for the parent company.

We often had a revolving catalog of new “marketing partners” the company would use to solicit loan applications. Every few months the sales force would be shown new websites built from scratch by the marketing team, introducing our new marketing arms.

It was important for Sales to know where our clients heard about the consolidation loan. My guess was these marketing “partners” were really shell companies invented by the parent financial company I worked for.

Shuffling through a series of marketing agencies made the parent company’s activity harder to trace, and were handy to replace any old shell marketing companies that were review bombed online.

Law Firm

The same would go for the law firms we used. Because we sold all across the U.S., the sales team was trained to provide each client with the name of a partner law firm we worked within the client’s state, a law firm that would represent them should they be sued and negotiate their debt on their behalf.

Only, the legal contracts we generated for each client were almost identical, regardless of state, regardless of the firm, with only the name of the law firm and the client’s name different on each form.

Considering what I had seen with the revolving series of marketing agencies, I began to suspect these “partner” law firms we were assigned to these clients were shells as well.

And having seen the caliber of the Litigation team in our actual office, I doubted there were enough, or even any, qualified lawyers to represent even a fraction of those we sold to.

All this to say, if something sounds too good to be true, it probably is. 0% interest? Negotiating a lower principal? 35% reduction guarantee? It just seemed less and less plausible to me.

Upfront Fees

And the upfront fees? A hollow legal and negotiations team? Face-to-face signings? Salespeople posing as financial consultants, who enrolled these people over the phone, advised them against bankruptcy, and then vanished from the entire process?

I would get calls from disgruntled clients about their credit scores tanking, and I promptly would refer them to our litigation department. I interfaced with them as little as possible once the sale was closed.

Salespeople Knew What Was Going On

Many of the salespeople around me weren’t stupid. They knew we were ripping people off.

The loyal ones were either totally dedicated to the scheme and could be trusted by the top brass, likely given the most promising leads and juicy commission percentages for the amount of debt they enrolled, or they were just naive enough to truly believe we were actually helping people.

The worst part was the manufactured competition management forced upon the sales team. In order to keep your sales job, you had to meet a certain quota of deals signed by your fifth month.

If you failed this quota, you would be fired. That’s it. In my time there, I shook the hands of more than a few red-eyed salespeople on their way out in their fourth or fifth month.

When asked, one of our trainers told us in the first two weeks this company had a churn rate of about 40%.

Later on, I suspected this five-month rule was because, at six months, one could apply for unemployment benefits, a snag this company wanted to avoid.

And by that point, whatever deals the “failed” salesperson had already made was already yielding straight profit. No need to keep paying the sales guy if they couldn’t keep up. And best to keep the understanding of outsiders to a minimum.

The scheme is simple once you understand it. It’s just taking money from those who already owe too much and are desperate to reduce their burden by any means.

But there are so many minute details and obfuscations, shell companies, and regulation gray areas, that it’s not apparently obvious.

Actual Results Were Disapointing

I remember at an all-staff meeting around New Year, our company CEO gleefully presented a PowerPoint where he claimed a whopping 4% of enrollees “graduated” from the program. Four percent.

We enrolled hundreds, maybe thousands of people into the “program” a month. I remember being chilled by how proudly he presented that information to us, how smug his bluff was.

Of course, there had to be some level of legitimate success the company could point to. A select few did need to have the debt settlement work for them, a select few did need to have the marketers’ consolidation loan approved, to offer some level of plausibility to the entire operation. But for the other 96%? We promised to negotiate their debt down. But I’m confident no such negotiation ever really took place, and if it did, it was nothing more than a farce.

I eventually made my way out. It felt like escaping a pit of vipers. The circumstances under which I left were less than amicable, and that is an entirely different story.

But for the purposes of warning people about fraudulent debt settlement companies, let this be a cautionary tale.

If you find yourself trying to get out of debt, if you get on the phone with a stranger who offers you an out-of-the-blue plan you’ve never heard of that’s going to make everything better, and then asks you “How does that sound?”…

If it sounds too good to be true, it probably is.