New FTC rule to reign in for-profit debt settlement companies
Date: Tue, 08/10/2010 - 09:26
Hi All,
I think this information will help many people from falling into the trap of fraud debt settlement companies.
With the increasing number of complaints against debt settlement companies, the Federal Trade Commission has introduced a law which can help put a check on their illegal activities. The new rule, which will come into effect from October 27, 2010, will bar the debt settlement companies from charging up-front fees from the consumers until there’s an agreement with the creditor, and the consumer should be informed of all the charges and fees.
The few other aspects of this rule will be effective from as early as September 27, 2010 and these are:
The new rule will cover all for-profit debt settlement companies, their telemarketers, credit counseling services, debt negotiation companies and other companies who falsely claim to have non-profit status. However, internet-only sales are not included in this new rule.
The FTC feels that this rule will stop companies who make false promises of reducing unsecured debts by half or more in exchange of large, upfront fees. This will save hundreds of consumers who take the services of these companies and end up losing thousands of dollars.
I think this information will help many people from falling into the trap of fraud debt settlement companies.
With the increasing number of complaints against debt settlement companies, the Federal Trade Commission has introduced a law which can help put a check on their illegal activities. The new rule, which will come into effect from October 27, 2010, will bar the debt settlement companies from charging up-front fees from the consumers until there’s an agreement with the creditor, and the consumer should be informed of all the charges and fees.
The few other aspects of this rule will be effective from as early as September 27, 2010 and these are:
- The for-profit debt settlement companies cannot misrepresent their services.
- The companies will have to make complete disclosures about their services and costs.
The new rule will cover all for-profit debt settlement companies, their telemarketers, credit counseling services, debt negotiation companies and other companies who falsely claim to have non-profit status. However, internet-only sales are not included in this new rule.
The FTC feels that this rule will stop companies who make false promises of reducing unsecured debts by half or more in exchange of large, upfront fees. This will save hundreds of consumers who take the services of these companies and end up losing thousands of dollars.
Thanks for posting that information! It is well overdue!
Thanks for posting that information! It is well overdue!
Wow, that's a great news!!!!! But, I'ld like to know what happen
Wow, that's a great news!!!!! But, I'ld like to know what happens to the settlement companies which only have internet presence. Will they continue to cheat people like before? Does the new rule mean that the settlement companies won't charge us anything until they get the settlement offer in writing from the creditors??
