Report Findings Validate Economic Benefits of Debt Settlement Programs for Consumers

An Updated Economic Analysis of the Debt Settlement Industry – Second Edition – September 2015

Fort Lauderdale, FL – September 16, 2015 – The results of nine year study of consumers enrolled in debt settlement programs, commissioned by the American Fair Credit Council (AFCC) and performed by the Certified Public Accounting firm of Hemming Morse LPP, show consumers realize financial benefit and have a higher probability of success since regulatory reforms went into effect in 2010. The August 2015 study, the second of its kind and a follow up to the original study commissioned by the AFCC in 2012, addressed the outcomes of over 1.9 million consumer accounts enrolled in debt settlement programs by approximately 297,000 consumers from January 1, 2006 through March 31, 2015.

The study, most comprehensive of its kind to look at the outcomes of debt settlement programs, revealed a number of positive findings for consumers seeking relief from the burden of credit card debt. Most notable among the findings are that consumers are receiving financial benefit in the form of debt reduction resulting from regulations imposed on the debt settlement industry through the Revised Telemarketing Sales Rule in October of 2010 by the Federal Trade Commission and The Consumer Financial Protection Bureau. Several highlights from the report include the fact that:

  • The average settlement of an account enrolled in a debt settlement program is 48% of the balance owed at the time of the settlement.
  • Over 50% of consumers settle accounts within the first 4 months of the program (vs. 12% prior to regulatory reform).
  • Over 90% of consumers had settled at least one account in the first 8 months of the program (vs. 65% prior to regulatory reform).
  • 45% of consumers had settled 5 or more accounts after 30 months in a debt settlement program.
  • 82% of consumers had settled 3 or more accounts after 30 months in a debt settlement program.
  • Debt reduction consistently ranged between $2.75 and $3.13 per $1.00 of fees paid for all client types (active, completed or terminated) over the life of a debt settlement program.
  • Over 95% of consumers enrolled in a debt settlement program after the implementation of regulatory reforms realized savings through these programs.
  • Consumers studied as a part of this report recognized $2.1 billion in debt reduction for a net savings after fees of approximately $1.4 billion or approximately $4,600 per consumer.

Robby Birnbaum, President of the AFCC commented, “We are pleased that this report validates what our association and its members have known years; that debt settlement programs provide a valuable and much needed option for consumers struggling with high amounts of debt and who cannot otherwise qualify for other options such as credit counseling or traditional financing such as debt consolidations loans or mortgage refinancing. Overall, the introduction of regulatory reforms for the industry has been positive and resulted in a higher likelihood of success for consumers. AFCC is proud of the work our member companies have done on behalf of consumers, delivering billions of dollars in debt reduction for struggling consumers.” For more information or to obtain a copy of the report, visit The American Fair Credit Council’s Website at

About The American Fair Credit Council

The American Fair Credit Council (AFCC) is the leading association of professional Consumer Credit Advocates. The AFCC, and its member companies, work to represent the rights of consumers struggling with the overwhelming burden of debt. The AFCC has developed a strict Code of Conduct centered on best practices designed to protect the rights of consumers and require member companies to follow strict regulatory guidelines for operation. All AFCC members operate on a “No Advanced Fee Model” and never charge a fee for services until a consumer’s debt has been successfully negotiated.


Robby Birnbaum – President

The American Fair Credit Council

Phone: (888) 657-8272


About Hemming Morse LLP

Founded in 1958, Hemming Morse, LLP is a national firm leading the accounting industry in Forensic and Financial Consulting Services, as well as Financial and Compliance Auditing of Employee Benefit Plans. Based in California, with more than 100 employees working from offices in San Francisco, San Mateo, Los Angeles, Walnut Creek, Santa Rosa, Fresno and Chico, Hemming Morse handles complex and high-profile assignments that are local, regional, national and international in scope.


Greg J. Regan, CPA/CFF, Partner

Hemming Morse LLP

Phone: (415) 836-4034