According to the new law implemented in 2010, debt settlement companies are forbidden from taking up-front fee. The companies are not permitted to promote the services that they won’t be able to provide. This new law was implemented to safeguard the consumers from illegal practices of the debt settlement firms. These companies charge huge fees without providing effective solutions to their clients.
According to the survey of a consumer advocate group, many of these debt settlement companies do not comply with the new rules enforced by Federal Trade Commission (FTC).
The debt settlement firms are targeting the potential clients through messages, Skype or Internet chats, or directly interacting with them. They are under the notion that these promotional techniques will not violate the U.S. telemarketing regulations. These companies also pose as law firms to settle debt and take up front charges. They try to dodge the FTC regulations on the pretext of a law firm. These are the two essential ways the debt settlement companies dodge the new FTC rule.
These debt settlement companies hire attorneys and exhibit them as debt settlement attorneys. They will claim to negotiate on your behalf with the creditors to reduce the owed amount. The company will charge the clients for a retainer fee upfront to begin the settlement process. But a few companies might falsely represent someone as an attorney that leads to violation of FTC rules. Therefore, you should verify the authenticity of the attorney before hiring their services.
You need to be aware of the new laws enforced by the FTC in order to evade the trap of illegitimate debt settlement companies. If the company abides by the new FTC rules, then you are (–foul word(s) removed–)ociated with a reliable debt settlement company. Therefore, ensure that you are working with an authentic company to regain your financial independence.
