FTC Bans Upfront Fees for Debt Settlement

[NESG]

The Federal Trade Commission announced a ban on up-front fees for debt settlement companies last week.

Companies that promise to reduce your credit card or other debts, will not be able to collect their fees until they do their job.

The new regulation aims to prevent companies from taking money from consumers and never fulfilling their promise to reduce said debt. This enforces and encourages performance based debt settlement companies.

FTC Chairman Jon Leibowitz stated that, “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,” Leibowitz said in a prepared statement.

This comes as good news for all consumers, and bad news for ‘bad actors’. We stress the importance of chosing a company that shows results, and now the FTC follows suit.

A summation of the rule is as follows:

•A debt settlement company cannot collect fees until the debt is settled
•A debt settlement company may set aside escrow reserves for the debts and their fees, but may not collect fees until the debt is settled
•A debt settlement company must show their results, showing length and costs

[hardikvagadiya@gmail.com]

Hello NESG,
Thanks for sharing this kind of worthful information in this forum,
It will be too much useful for everyone in this forum.
Specially you mentioned;

•A debt settlement company cannot collect fees until the debt is settled
•A debt settlement company may set aside escrow reserves for the debts and their fees, but may not collect fees until the debt is settled
•A debt settlement company must show their results, showing length and costs

This three points are so important and useful
Thanks.