May 12, 09
(MADISON, Wis.)— Consumers struggling with debt have far fewer complaints with the debt settlement industry than critics have alleged. The Better Business Bureau (BBB) has released statistics that reveal critical flaws in its own grading system.
According to the BBB’s 2008 Complaint and Inquiry Statistics, the number of complaints issued over the course of the year for credit card counseling is disproportionately higher than the number filed for debt settlement. In fact, credit counseling services had approximately 4.5 times as many complaints recorded by the BBB than debt settlement companies in 2008.
Yet, the BBB continues to award poor rankings to the debt settlement industry under a system that makes it virtually impossible for a debt settlement company to be rated anything other than a ‘D’ or ‘F’. Meanwhile, companies in the credit counseling industry are not penalized.
“As a more valuable service to consumers with unsecured debt, debt settlement should be ranked higher than credit counseling, especially since debt settlement has twice the completion rate and resolves debts in a shorter amount of time,” Chris Kesterson, President of The Association of Settlement Companies, said. “It is facts like this that show the BBB’s rating system needs an overhaul.”
The BBB’s statistics also showed that debt settlement resolved 91.5 percent of its complaints compared to just 83.9 percent for credit counseling.
Kesterson said he and his organization will continue to urge the BBB to adjust its ratings so that they may more accurately reflect the statistics.
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