Debt Settlement Upfront Charges FTC Steps In

An FTC ruling that takes effect on October 27th 2010 will stop debt settlement companies from taking any fees upfront. The rule is an ammendment to Telemarketing Sales Rules, and will stop debt settlement companies that opperate on a for profit basis from collecting advance fees over the telephone before they take any action to settle or reduce a customer’s unsecured debts.

Chairman of the FTC, Jon Leibowitz said. “This rule will stop companies who offer consumers false promises of reducing credit card debts by half or more in exchange for large, up-front fees. Too many of these companies pick the last dollar out of consumers’ pockets – and far from leaving them better off, push them deeper into debt, even bankruptcy.”

The final rule, regarding debt settlement and debt relief companies, places specific requirements on these providers and requires that they not charge any upfront fees and that any such fees are only payable on performance.

This rule will now allow consumers to contact debt settlement specialists with the confidence that any solutions will not put them further into debt and that they will not have to pay a dime until there debt situation is improved.

It is always advisable to use certified proffessional debt relief
companies and this will now be a lot easier.