5 ms·

Debteye (YC S11) Wants To Be Your (Much Cheaper) Credit Counselor

93 points by mlinsey 15y ago

dabent 15y ago
I'm curious how this will stack up against groups in the National Foundation for Credit Counseling members. (http://www.nfcc.org/ 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.
nhashem 15y ago
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 15y ago
  YC isn't afraid to invest in companies that do similar things - both ZumoDrive and DropBox were YC companies.
  - dlevine 15y ago
    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.
- jsun 15y ago
  We target a slightly different market than ReadyForZero, RFZ targets customers who are trying to set up a structured approach to paying off debts on their own, whereas we help guide those customers who may not have the finance resources to be able to pay off on their own.
  - felideon 15y ago
    Right. I use RFZ and I assume only people who are current and can afford making more than minimum payments can take full advantage of RFZ. Also, it currently focuses on getting rid of Credit Card debt, using a high-interest-first strategy. And speaking of RFZ, I had to log on to RFZ in order to fill out my cc debts on Debteye[1], whereas on RFZ I just gave them my login information and they "figured" it all out. :D [1] I even filled in my, shudder, SSN on debteye.
gleb 15y ago
Congrats on the launch!
- jsun 15y ago
  thanks!
  - alexkiwi 15y ago
    Design looks great, glad you guys listened to me... sort of ;)
    - jsun 15y ago
      thanks dude:)
patio11 15y ago
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 15y ago
  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 http://www.daveramsey.com
  - jsun 15y ago
    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!
    - mrkurt 15y ago
      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.
  - alanfalcon 15y ago
hnal943 15y ago
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 15y ago
  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.
nicksergeant 15y ago
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 15y ago
  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 15y ago
    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".
curt 15y ago
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.
djm 15y ago
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 15y ago
  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 15y ago
    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.
deleted 15y ago
[deleted]
dhughes 15y ago
> Here’s how it works: first, the service prompts you to enter your bank login credentials... No.
- ComputerGuru 15y ago
  That's just stupid, read on. You don't give them this info, you give it to Yodlee, the same people behind Mint.
  - dhughes 15y ago
    Still. There's no way in hell I'm letting anyone have access to my bank info.
    - Confusion 15y ago
      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
narrator 15y ago
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!
bragen 15y ago
Is it really an LLC? (See footer.) That would seem strange for a venture-funded company.
- jsun 15y ago
  No, it's not haha. that has been fixed.
prawn 15y ago
Found it quite jarring that the home page (http://www.debteye.com/home http://www.debteye.com/home) and blog (http://blog.debteye.com/ http://blog.debteye.com/) look like completely unrelated organisations visually. Am I missing something?
k33n 15y ago
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 15y ago
  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

93 points by mlinsey 15y ago

I'm curious how this will stack up against groups in the National Foundation for Credit Counseling members. (http://www.nfcc.org/ 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.

nhashem 15y ago

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 15y ago
YC isn't afraid to invest in companies that do similar things - both ZumoDrive and DropBox were YC companies.
- dlevine 15y ago
  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.
jsun 15y ago
We target a slightly different market than ReadyForZero, RFZ targets customers who are trying to set up a structured approach to paying off debts on their own, whereas we help guide those customers who may not have the finance resources to be able to pay off on their own.
- felideon 15y ago
  Right. I use RFZ and I assume only people who are current and can afford making more than minimum payments can take full advantage of RFZ. Also, it currently focuses on getting rid of Credit Card debt, using a high-interest-first strategy. And speaking of RFZ, I had to log on to RFZ in order to fill out my cc debts on Debteye[1], whereas on RFZ I just gave them my login information and they "figured" it all out. :D [1] I even filled in my, shudder, SSN on debteye.

gleb 15y ago

Congrats on the launch!

jsun 15y ago
thanks!
- alexkiwi 15y ago
  Design looks great, glad you guys listened to me... sort of ;)
  - jsun 15y ago
    thanks dude:)

patio11 15y ago

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 15y ago
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 http://www.daveramsey.com
- jsun 15y ago
  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!
  - mrkurt 15y ago
    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.
- alanfalcon 15y ago

hnal943 15y ago

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 15y ago
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.

nicksergeant 15y ago

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 15y ago
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 15y ago
  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".

curt 15y ago

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.

djm 15y ago

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 15y ago
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 15y ago
  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.

deleted 15y ago

[deleted]

dhughes 15y ago

> Here’s how it works: first, the service prompts you to enter your bank login credentials... No.

ComputerGuru 15y ago
That's just stupid, read on. You don't give them this info, you give it to Yodlee, the same people behind Mint.
- dhughes 15y ago
  Still. There's no way in hell I'm letting anyone have access to my bank info.
  - Confusion 15y ago
    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

narrator 15y ago

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!

bragen 15y ago

Is it really an LLC? (See footer.) That would seem strange for a venture-funded company.

jsun 15y ago
No, it's not haha. that has been fixed.

prawn 15y ago

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

k33n 15y ago

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 15y ago
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