Regan Report – Second Edition

Options for Consumers in Crisis

An Economic Analysis of the Debt Settlement Industry
Second Edition - Published August 15, 2015
Greg J. Regan

In 2012, the American Fair Credit Counsel (AFCC) commissioned the 2012 Report in order to perform the first-ever independent analysis of the economic consequences of participation by financially challenged consumers in debt settlement programs. Using this data, the AFCC pursued this updated “Regan Report” to capture the most up-to-date information on the impact of debt settlement and the consumer experience.

The most challenging aspect of the 2012 report was that there were two separate consumer groups from which the team analyzed outcomes. There was Version 1.0 (prior to October 2010) and Version 2.0 (the “no-advance fee model,” which became the only legitimate operating model for debt settlement companies after October 2010).

Overall, this analysis addressed the outcomes of 1.9 million individual accounts that were enrolled in debt settlement programs from January 1, 2006 through March 31, 2015.

Key takeaways include:
  • Debt settlement clients received a $2.99 debt reduction for every $1.00 of fees paid.
  • In total, all of the individuals studied in this report saw $2.1 billion in debt reduction.
  • In the aggregate, each segment of consumers, including those that did not complete the program, saw some form of savings.
  • All active clients received at least $2.85 in debt reduction for every $1.00 in fees.
  • Over 50 percent of Version 2.0 clients (who are either active or had completed the debt settlement program) saw at least one settlement within the first four months of enrollment.
  • By month eight, over 90 percent of these Version 2.0 customers experienced at least one settlement.
Companion Reports

Options for Consumers in Crisis

In 2012, the American Fair Credit Council (AFCC) commissioned the first-ever independent analysis of the economic impact of the debt settlement industry on enrolled participants. Since then, the AFCC has commissioned four reports overseen by Greg Regan of Hemming Morse LLP, all of which exemplify the immense benefits of debt settlement for consumers struggling with unsecured debt.

State Versions
Options for Consumer in Crisis

The following state-specific versions of the recent independent “Regan Report” are a supplement in the series of reports overseen by Greg Regan of Hemming Morse LLP. These iterations exemplify how debt settlement serves consumers in financial hardship each day by offering significant and measurable financial benefits.

Financial Outcomes for Debt Settlement Programs

The American Fair Credit Council (AFCC) commissioned these two reports in 2019 and 2020, both of which were completed by Will S. Dobbie, Professor of Public Policy at Harvard Kennedy School of Government. The reports examine current evidence as well as past research conducted by Greg Regan of Hemming Morse LLP, while concluding that the Regan Report’s results were correct and debt settlement programs offer significant benefits to financially distressed individuals.

Economic Impact Report

The 2019 and 2020 Economic Impact Reports analyze the debt settlement industry’s national and local economic impact. These independent studies, which were commissioned by the AFCC from John Dunham & Associates, demonstrate the overwhelming importance of debt settlement for consumers, the U.S. economy as a whole, and state economies across the nation.