Debt Settlement Consumer Protection Act Means No More Advance Fees For Debt Settlement

Debt Settlement Consumer Protection Act Means No More Advance Fees For Debt Settlement

"Debt settlement consumer protection act means no more advance fees for debt settlement." This is true because, the debt settlement consumer protection act which was implemented by the Federal Trade Commission on 27th October 2010 forced several changes in the relief industry, which changed how the settlement industry worked. Prior to the act, the relief industry had a rule according to which the consumers were required to pay the fees for settlement in advance to the relief firms. Taking advantage of this rule, some of the shady firms actually cheated the consumers.

They collected fees from the consumers and then they did not go for negotiation with the creditors. When the consumers inquired about the progress, they reported that the creditors are not ready for settlement and they are adamant to get back their money in full.

This method of cheating the consumers actually started hurting the reputation of the relief industry and the interest of the consumers were hurt. The consumers lost their money and they had to finally opt for bankruptcy even though they never wanted to. It is because of this that the consumers lost faith on these relief programs. The FTC announced a ban on the advance fee collection from the consumers.

The firms were ordered to help the consumers to get a forgiveness of a minimum of 35% and then when the consumers move out of their outstanding by paying the remaining amount to the creditors, the settlement firms can actually demand their service fee. The consumers can no directly say "NO" to the relief firms in case they ask for upfront fees. The consumers can even report about this demand to the FTC. Thus, the relief firms are afraid that in case they ask for advance money and if the consumers report the same to the FTC, the companies will be in trouble. Thus now, these firms never ask for advance payment of fees. Hence, debt settlement consumer protection act means no more advance fees for debt settlement.

With the new FTC laws recently passed, debt settlement is a legitimate alternative to filing bankruptcy. Creditors are ready to negotiate and now you won't have to pay a fee unless your debts actually settle. Check out the following link to locate legitimate debt relief companies in your state for free help.

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