New Rules in Nationwide Debt Settlement Collection Processes

June 19, 2012 by  Filed under: Debt 

The Federal Trade Commission, in an effort to try to protect consumers from dishonest debt settlement companies, issued amendments to its October 2010 Telemarketing Sales Rules and calling for an immediate implementation of these amendments as well as the rules, to ensure a drastic reduction of the numbers of dishonest debt settlement companies in order to try to save consumers with credit card debt and other unsecured debt from getting scammed by dishonest companies. This has worked for the most part but there does seem to still be unscrupulous providers, which are taking advantage of consumers in need of help.

Consumers must take great care when considering, which settlement company to hire because the cost to their financial future may be very great. A very important aspect of the amendment to the 2010 Federal Trade Commission Rule addresses the problem of fees a debt settlement company can charge especially when the fees can be collected and details regarding calculation of the amount of fees. In regards to when fees can be charged, the rule now contains specific restrictions and requirements on these companies relating to in advance charging fees before any services are rendered.

The amendment clearly states that no fees for debt Settlement Company services can be collected until the following services are completed:

  • the debt relief service successfully re-negotiated, settles, reduces, or otherwise changes the terms of at least one of the consumer’s debts
  • there is a written settlement agreement, debt management plan, or other agreement between the consumer and the creditor, and the consumer has agreed to it
  • the consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt relief provider

Once the above requirements are completed, a fee may be charged by the debt reduction company. The bases on which the fees may be calculated include, the total debt or how much money the company saved the consumer. No matter which basis the settlement company chooses to use, once the account has been settled, the discussed company cannot collect or charge any other fees for accounts which have not been settled. Unfortunately, the Rule says nothing in regards to the amount of fees, which can be collected in hopes that this can be agreed upon between the debt settlement company and the consumer.

The FTC hopes that all debt settlement companies will provide for their clients a best estimate of what the charges may be. In addition, the debt settlement companies charges for a single account must be in proportion to what the total fee would be if all accounts were settled. An attorney from your state is typically in total compliance with the FTC Rules and amendments with fees based on a percentage of what the savings is to the consumer and is discussed and agreed upon by both client and attorney. Typically, there are not any up-front fees, maintenance fees, retainer fee, or any hidden fees or charges for the clients in need of help on their debt.

Melvin R. Singleterry, owner of Associated Attorneys is a practicing debt reduction attorney who specializes in helping you settle credit card debt. Singleterry, who holds a Bachelor and Master of Arts degrees from Oklahoma State University and a Juris Doctor from The University of Oklahoma, has practiced in both State and Federal Courts.

Singleterry served pro bono as legal counsel for The Albert Schweitzer Society, USA, Inc. He organized and operates Associated Attorneys, LLC, a corporation dedicated to assisting consumers obtain legal counsel for help with negotiation and settlement of their unsecured debts.

Article Source:
http://EzineArticles.com/?expert=Melvin_Singleterry

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