NATDRC Conference to Address Ways to Eliminate Fraudulent Lead Aggregators First official meeting of the National Association of Tax Debt Resolution Companies prioritizes regulation of companies using deceptive advertising.
BigNews.Biz - May 01,2012 - Encino, CA, May 01, 2012 -- On the slate of issues to be discussed at the first official meeting of the National Association of Tax Debt Resolution Companies (NATDRC) in Washington D.C., May 20-21, is the regulation of companies utilizing deceptive advertising claims and misleading trade practices that solicit unsuspecting consumers (by advertising on the internet, radio, and TV) who believe that they are hiring an attorney, CPA, or Enrolled Agent to represent them before the IRS/State. Nothing can be further from the truth.
A lead aggregator is defined as a company that aggregates, or brings together, a variety of tax debt problem resolution firms looking to “buy” leads and affiliates looking to produce leads. The aggregator provides marketing and technology resources that the individual participants do not have the resources to afford individually, and brings these different parties together in a way that they could not without an intermediary. The problem with this model is that it promotes deceptive advertising and business practices.
Due to the bursting of this country’s financial “bubble,” in 2008, thousands of so-called credit card debt settlement companies sprung up virtually overnight, luring consumers in and promising to settle their (credit card) debts for “pennies on the dollar.” Many of these so-called companies (which were really lead aggregators/generators) simply sold consumers’ private, confidential, personal information to their affiliates, behind the consumers’ backs, to others who would attempt a settlement/resolution. Many of these affiliates, and the aggregators, simply took the money and ran. These unscrupulous operators lured clients in via large national advertising campaigns on the internet, radio and TV. These ads were deceptive and, at best, misleading.
Due to the hundreds of thousands of consumer complaints, the Federal Trade Commission (FTC) amended the Telemarketing Sales Rule in August 2010, essentially making it illegal for these firms to accept up-front payments from consumers and prohibiting them from collecting a “fee” until a final, successful completion was reached with the consumers’ credit card companies. This was a much needed “death knell” that put over 80 percent of these unscrupulous companies out of business.
These companies, not to be undone by the FTC, thought it would be an easy “cross-over” into the tax debt relief industry as the targeted end consumer essentially has the same profile and demographic as the credit card debtor. Additionally, instead of doing their own marketing and controlling critical intake criteria, many unscrupulous tax debt relief firms relied on others to get them leads/prospects. Since these lead aggregators are unregulated (unlike CPAs, attorneys, or Enrolled Agents), they often can get away with making outrageous claims in order to solicit consumers who in reality do not qualify for tax relief in the first place.
Most tax debt lead aggregators’ marketing and advertising is deceptive and misleading. Generally, they don’t tell consumers that they will be “referred” or “matched” to one of their affiliate companies. These aggregators do not do the actual case work; the cases are “farmed out.” Generally, once you give them your personal
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