New Fed regs to stop debt relief firms from charging up-front fee

[SpartanDem]

The Federal Trade Commission is imposing new regulations that will prohibit most for-profit debt relief companies from charging a fee before they have reduced a client's unsecured debts.

The FTC says the rules, which take effect Oct. 27, will prevent consumers from paying large up-front fees for debt reduction promises that are not fulfilled. They do not limit the size of fees, only their timing.

The debt settlement industry says the rules will force most companies out of business because it will take at least a year to collect any fees.



From The Detroit News: http://detnews.com/article/20100809/BIZ01/8090313/1010/New-Fed-regs-to-stop-debt-relief-firms-from-charging-up-front-fee#ixzz0w86IgjP4