New Debt Relief Company Rules Announced by Federal Trade Commission
Saturday, August 14th, 2010So many consumers have complained about debt settlement companies that the federal government has finally taken some action.
Yesterday, the Federal Trade Commission announced a new restriction on debt settlement companies which is designed to address the growing nationwide problem of so-called debt relief companies making outlandish promises of success, but ultimately failing to do anything.
Up-Front Fees Charged by Debt Settlement Companies to be Prohibited
The new rules, which will take effect in the fall, will prevent debt settlement companies from charging any up-front fees before they settle or reduce a customer’s credit card debt.
I have reported previously that I regularly meet with clients who were promised the moon by debt settlement companies; yet these companies ripped them off after charging large up-front fees, failing to achieve settlements, and leaving the consumers in a worse position than they were to begin with. I