Today, the Federal Trade Commission came down hard on for-profit debt relief
firms. The FTC’s new amendments to the Telemarketing Sales Rule will prohibit
debt relief companies from collecting advance fees, among other things. Here is some basic
information about the new Rule.
Who: The Federal
Trade Commission, which enforces the Telemarketing Sales Rule, has developed
the new rules.
The rule applies to all for-profit debt relief agencies that
sell debt relief services over the telephone, including those that discuss
settlement over the phone with prospective clients. In other words, they don’t have
to be cold-calling consumers to be covered by the rule.
When: These final
amendments are effective on September 27, 2010, except for the upfront fee ban,
which is effective on October 27, 2010.
What: The Rule
will:
(1) prohibit debt relief service providers from collecting a
fee for services until a debt has been settled, altered, or reduced;
(2) require certain disclosures in calls marketing debt
relief services; and
(3) prohibit specific misrepresentations about material
aspects of the services.
I will write more as I sift through the
details.
Gerri Detweiler Credit.com's Personal Finance Expert, Gerri focuses on financial legislation, budgeting, debt recovery and consumer savings information. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.comTalk Credit Radio. Reach Gerri at creditexperts@credit.com.
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The rule does not seemingly apply to Debt Settlement Attorneys