Compliance

Understanding Compliance

In performance-based industries like Student Loan Consolidation & Credit Repair Servicing, compliance is crucial. Regulatory bodies like the FTC, CFPB, and the Department of Education require that fees cannot be charged to customers until services are fully rendered. While this protects consumers, it exposes businesses to significant financial risk as services must be committed before payment is secured. Bee Pay offers a robust solution to mitigate this risk.

Our Solution

Bee Pay ensures your compliance by drafting and holding your customers’ funds in our secure escrow/trust account. This method secures your revenue until your consolidation services are complete. Once services are rendered, we release the service fees to you, keeping you fully compliant with FTC, CFPB, and Department of Education regulations.

Debt Settlement Rules from the FTC

According to the FTC, providers can only collect payment after the following conditions are met:

Renegotiation or Settlement: At least one of the customer’s debt obligations must be renegotiated, settled, reduced, or issued new terms.
Written Agreement: A written settlement agreement, debt-management plan, or other agreement must be in place between the customer and the creditor.
Payment to Creditor: The customer must make at least one payment to the creditor following the agreement negotiated by the service provider.

The debt relief provider’s fee for a single debt must be proportional to the total fee if all debts were settled. If the fee is based on the percentage of what the consumer saves, the same percentage must be applied to each of the consumer’s debts.

Dedicated Accounts for Fees and Savings

Customers are required to place fees and savings in a dedicated account. Previously, these funds might have gone into an “escrow account” or “savings account” that wasn’t established as a true bank account. The FTC now requires that dedicated accounts adhere to the following rules:

The account must be established at an insured financial institution.
The customer must own the funds, including any interest accrued.
The consumer must be able to withdraw the funds at any time without penalty.
The provider must not have any affiliation with the financial institution.
The provider must not exchange any referral fees with the financial institution.

Required Disclosures

Providers must make several disclosures when marketing their services to customers before they sign up for any debt-relief services. These disclosures include:

The cost of services and any refund policies.
The amount of money customers will need to save to settle their debts.
Potential effects on credit, risk of lawsuits, and possible tax consequences.
Key information about dedicated accounts.
Whether the provider is a for-profit or nonprofit entity.
The expected timeline for consumers to see results.
Accurate estimates of how much money a consumer will save.

Partner with us to secure your business and provide peace of mind to your customers!

At Bee Pay, we understand the complexities of compliance and are dedicated to helping you navigate these regulations effortlessly. Our secure escrow accounts not only protect your revenue but also ensure that you remain in full compliance with all regulatory requirements.

Let Us Help: info@gobeepay.com