

Debteye (YC S11) Wants To Be Your (Much Cheaper) Credit Counselor - mlinsey
http://techcrunch.com/2011/07/26/yc-funded-debteye-wants-to-be-your-much-cheaper-credit-counselor/

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patio11
_This part made me skeptical (wouldn't a professional debt consultant be
better at negotiating good terms than your average layman?)._

If you assume the debt consulting is working for the debtor, then yes, it
would be reasonable to assume they would be better at negotiating terms than
the average layman. There is a very dangerous assumption in this sentence.

If you ever have a credit related problem, and are considering talking to a
credit counselor, jump into a vat of pond scum. There, I just saved you
several thousand dollars, and you'll feel cleaner in the bargain.

(Serious advice: you will get better advice from either a lawyer or the Motley
Fool Credit Cards and Consumer Debt forum than from credit counselors.)

~~~
hnal943
Completely agree. It made me cringe to read that the founders are already
"credit councilors." It's possible that they could have the debtor's interests
in mind, but unlikely given the state of that industry.

The best advice I have found is from Dave Ramsey. <http://www.daveramsey.com>

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jsun
I would agree with you here, and I hope you will judge us on our product
rather than the "state of the industry" One HUGE difference between ourselves
and credit counselors is that we don't get any sort of pay out from creditors,
our clients are the only ones we have a responsibility to, whereas credit
counselors, even non-profits, take what's called a "fair-share" fee from
creditors, which is basically a % "donation" based on how much the credit
counselor collects. We believe this aligns our incentives a lot closer to our
customers!

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mrkurt
For what it's worth, businesses that fix incentive alignment problems fall
firmly into the "things I want to see more of" category. CarWoo is a good
example, I hope you guys blow it out of the park.

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k33n
So I actually tried the product unlike 99% of commenters here and here is my
feedback:

\- The custom dropdowns made it more difficult for me to sign up because you
can't use keys on the keyboard to jump to different locations in the lists
like you can everywhere else.

\- The mechanic to change the monthly payment I can afford on the plan you
guys laid out for me was horrible. Clicking the arrow repeatedly to change a
numeric value? At least having the option to edit it by typing would be nice.
I had to click a lot to change the amount from $10,000 (which I initially
input) to $300.

\- I can't possibly take the plan seriously when one of the cons is "Risk of
lawsuit" with no other details.

\- Love the general concept. As someone with some debt, this could help me.

\- It pulled up my debts FAST after I filled out the initial form. Almost
frighteningly fast. I was impressed, then pretty worried that you might be
skirting laws and regulations surrounding pulling this type of information.
With nothing more than my SSN and basic personal details (address, etc) you
handed me very detailed information about my debts on a silver platter. Most
companies verify the identity of a user before this step with some kind of an
intermediate challenge step.

Keep on keeping on. Cool product idea.

~~~
jsun
Thanks for the advice, we'll definitely fix a lot of this stuff in the coming
releases over the next couple of weeks, keep your eye out! and thanks for
giving us a shot.

The identity verification is the Name + Address + SSN match, which is all
that's required for presentation of the data that we showed you. If you wanted
to see your score or more detailed repayment history information there would
be a short identity verification quiz

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narrator
Hate to be a naysayer, but there is really a negligible amount of money in
debt counseling. It's the finance equivalent of shoe repair. Yes, a few small
well positioned operations can make a living on it, but no large company is
going to bother with that business. Clients are flaky, have no money and like
to do chargebacks. Every situation is a bit different, there's a lot of
customer service issues and most people who would be low maintenance customers
are do-it-yourselfers. Good luck!

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nhashem
Very interesting idea, but doesn't another YC company (ReadyForZero) already
do something similar? It sounds like Debteye has more options to
negotiate/restructure debt, but I see a lot of overlap here.

~~~
unexpected
YC isn't afraid to invest in companies that do similar things - both ZumoDrive
and DropBox were YC companies.

~~~
dlevine
For the record, ZumoDrive didn't do ZumoDrive when they were in YC. They did
Versionate, a versioned Wiki.

Your observation does still stand, though.

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nicksergeant
I went through the process out of curiosity, and I got to a page asking me to
enter my bank account information. Huge, huge red flag for someone who doesn't
know you from a hole in the wall. Why would I give you my bank account
information at this point? Am I already approved? Is this a loan? What
happens? When is my first payment?

All of these went through my head before I tried to find a way to cancel my
account (couldn't).

I like this idea, but there is simply not enough information about what you're
going to do with my financial life. How exactly are you going to help me?

~~~
jsun
Thanks for the advice! we'll definitely add more guidance here. Basically when
you reach that step we don't do anything with your information until we've
reached out to you and confirmed the plan details and walked you through what
the product is. Very valid points about lack of education throughout the
registration process.

~~~
nicksergeant
Gotcha. Also, the minimum payment that I was able to select was about $200
more than my current credit card minimum payments. I also was able to select a
"how much I can pay" number that wasn't allowed:

"The payment plan and terms selected are not compatible"

That's what I get after I click "Choose this plan and start". It took me a few
times to figure out why I got that error. I had to fiddle with the monthly
payment to get it above a number that was "compatible".

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djm
I'd be curious to know if this service is limited to helping people set up
payment plans? I'd be pretty concerned if this is the case - I used to work in
this field for a charity providing debt advice in the UK and pretty much rule
number #1 is to advise somebody of _all_ of their options, including stuff
like bankruptcy.

A service that does not do that is doing a pretty bad job imo. If you have
spent any time with people who have debt problems you would know that by the
time they seek help they are in a situation whereby (for a large % of cases)
bankruptcy or court-ordered payment plans are the only viable option they
have. Getting somebody onto a payment plan when they should be going bankrupt
is doing them a huge disservice.

I considered some years ago going into this market myself but I could never
get past the need for face to face meets with clients. Getting them to
accurately provide you with enough information that you can give them proper
advice is hard enough in person, let alone online.

In any case, I'll be interested to watch this and see how you guys get along
with it. Good luck.

~~~
jsun
djm - This service is not limited to setting up payment plans, and will
include education, budgeting, and community. We definitely don't try to push
any one method over the other, and will in fact suggest that the customer
reaches out for legal aid in certain situations.

~~~
djm
Hi, thanks for your reply. It's good to know you're trying to provide a
comprehensive service.

I'm still pretty sceptical however because I think you will encounter a lot of
cases that are difficult to diagnose just by looking at a persons data.

For example, the first ever case I dealt with was an autistic lady who had
been scammed into buying broadband when she didn't have a computer. She only
understood that she had signed up to the service when she started getting debt
collection letters for not paying the bill. If I hadn't met her in person and
only seen her data I probably would have just set up a repayment plan instead
of writing to the ISP and challenging her liability for the debt which is what
I actually did.

You'd be surprised how many odd cases like this pop up.

~~~
jsun
I definitely agree. There will always be a place in the market for face to
face consultations. After all, credit "counseling" is an act of counseling,
not just hard financials. To us the four pillars of financial stability (for
customer already in financial distress) are Education, Budgeting, Counseling,
and Community. We can obviously provide some of these but not others. The idea
here is to leave the counseling to the experts, but be able to offer something
to the vast majority of Americans who go through credit counseling today but
only really need a little extra push to get them on the right track again.

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dhughes
> Here’s how it works: first, the service prompts you to enter your bank login
> credentials...

No.

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ComputerGuru
That's just stupid, read on. You don't give them this info, you give it to
Yodlee, the same people behind Mint.

~~~
dhughes
Still. There's no way in hell I'm letting anyone have access to my bank info.

~~~
Confusion
That's because you're not in the uncomfortable, perhaps desperate, situation
of needing a credit counselor. At some point, your bank info is, and should
be, the least of your worries

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dabent
I'm curious how this will stack up against groups in the National Foundation
for Credit Counseling members. (<http://www.nfcc.org/>) Then again, they may
end up joining that group. I'm not affiliated with NFCC, but I understand they
offer much of what Debteye offers already.

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prawn
Found it quite jarring that the home page (<http://www.debteye.com/home>) and
blog (<http://blog.debteye.com/>) look like completely unrelated organisations
visually. Am I missing something?

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curt
Great idea but hope you guys are changing the UI/UX. The diagonal lines being
blue and the text being blue cause the eye/brain to want to close the shape
which is quite distracting. Take a look at the contrast and fixing the anti-
aliasing.

Really think about the emotional response you want to trigger in your
customers. For a lot of people this is a very harrowing experience and the
design should provide comfort. There's a evolutionary psychological response
called the savanna preference, it triggers a clinically tested calming
emotional response. Should work wonders. If you have questions about how to
trigger different emotional responses (trust, calm, etc) in the design, feel
free to reach out. Plan on writing a blog post about it at some point in the
future.

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bragen
Is it really an LLC? (See footer.)

That would seem strange for a venture-funded company.

~~~
jsun
No, it's not haha. that has been fixed.

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hnal943
Personal debt reduction is primarily about behavior modification, much like
losing weight. I don't see much in this startup that focuses on changing
people's habits.

~~~
jsun
On the contrary, a lot of what we try to do is longer-term behavior
modification - "gamification" of the "get out of debt" process if you will.
Once you sign up you'll get monthly and weekly "goals" that we encourage you
to complete, simple things which take no more than 10-20 minutes each, but
will effect longer-term change in the way you use and view credit. Alot of
this isn't visible from the front-end yet, but we'll be adding more material
as times goes on.

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gleb
Congrats on the launch!

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jsun
thanks!

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alexkiwi
Design looks great, glad you guys listened to me... sort of ;)

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jsun
thanks dude:)

