New FTC's Restrictions Placed On Debt Settlement Companies
The Federal Trade Commission announced new restrictions on debt settlement companies that reduce and eliminate debt on consumer's behalf. The new regulations will help curb deceptive and abusive practices in debt relief services sold through telemarketing, according to Consumers Union, the nonprofit publisher of Consumer Reports.
- Orange County, CA (1888PressRelease) August 21, 2010 - If you are considering a debt settlement company, there are new laws in place by the FTC providing the consumer new protections. By familiarizing yourself with these new regulations you can ensure that your experience will go well.
Prior to these new debt settlement regulations, credit help companies could charge very large fees up front and not provide all the services they had promised. Consumers were finding that often they were going further in to debt, than out of, when using these less than reputable companies. Most companies did not fall under these conditions, but the few that did caused many people a lot of grief.
The Federal Trade Commission stepped up and placed into effect new rules regarding fees. First, any company providing professional services to a consumer in the form of debt help may only charge a simple start up fee to begin with. Once the account has been established, the credit company must provide a list of services it wishes to provide and the accompanying costs. The services can only be charged for once the service has been completed.
So, if a company has stated they will negotiate a settlement on a credit card for the cost of "x", they must complete that task before receiving payment. Some companies will be allowed to charge a percentage of the amount of debt they have reduced, this is allowable, but only after the task has been completed. Consumers must read and understand the terms of service before committing to a program for help.
This added consumer protection allows those seeking help to benefit from these service providers without additional debt and hardship. Prior to these rules, a company could charge several thousands of dollars up front and than not produce the results they promised. Now, they must provide results if they intend to get paid.
These rules are a benefit to consumers and legitimate businesses alike. Now, debt settlement companies that have always offered professional courteous services will no longer have to compete with non-legitimate companies only out to make a quick buck. The bad companies will fall to the side once they are required to provide service before receiving payment. The laws, set to go into effect in September, 2010, will benefit everyone involved in the debt negotiations.
About DebtSettlementLink.com:
The debt negotiation and debt settlement attorneys at http://www.DebtSettlementLink.com can act on their clients' behalf to stop them becoming victims of creditor harassment. By offering their debt negotiation and debt settlement services through DebtSettlementLink.com, they are looking forward to helping restore financial stability and security to American families.
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