Debt Settlement Laws 2010 - How New FTC Laws Make Debt Settlement A Better Option
This past July, the FTC passed a new set of regulations on the debt settlement industry, adding increased consumer protections and weeding out fraudulent practices of some companies taking advantage of their clients. These new laws make collecting upfront fees illegal and consumers now won’t have to pay a dime until their debts are actually settled. Debt settlement is now a much less risky option for consumers seeking debt relief.
New restrictions specifically target these companies and are meant to protect consumers from falling victim to bad industry practices. Below is a list of several of the key changes the FTC is implementing, as well as how they help consumers get the best deal on settling their debts.
Limiting upfront fees – Under new rules, debt settlement companies cannot charge clients upfront fees on their services. Clients now only have to pay their debt settlement company once they actually reach a settlement with their creditors. This means companies that make promises to reduce a client’s debt dramatically, must actually deliver. Clients do not have to pay for services that don’t follow through.
Increasing transparency – Another way to prevent debt settlement firms from making unrealistic guarantees to clients or taking advantage of consumers is to make sure that consumers better understand the debt settlement process. Consumers with high card debt or bills may be desperate and try anything to get out of debt, which means they may not take the time to ask important questions about how long debt settlement takes, how much it costs or how it effects their credit.
The FTC’s new rules require that debt settlement companies explain this information upfront so that clients know exactly what they are getting into. This increased transparency gives consumers a better idea of what to expect with debt settlement, how much they will save, and whether it is a good option for their debt. It would be wise to use a site like FreeDebtReductionHelp.com to find legitimate debt settlement companies.
Enhancing oversight – Overall, new regulation on debt settlement show that FTC is acting as a watchdog over debt relief options. With the economy putting many consumers deeper in debt, it is important that regulating organizations such as the FTC look out for consumer interests and enforce limits and consumer protections on the debt industry. By increasing the accountability of debt settlement companies, the FTC helping consumers get out of debt easier and faster, and for less money.
Debt settlement is a legitimate alternative to filing bankruptcy however it is not the only debt relief option available. Check out the following link to speak with a certified debt relief specialist who will go over all your options for free:
Or Call: 877-853-6466
- Contact Information
- Michael Smith
- United Debt Associates
- Contact via E-mail
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