Starting on September 27, 2010, new telemarketing sales rules will take affect. The rules covers telemarketers of for-profit debt relief services, including credit counseling, debt settlement, and debt negotiation services. The rules will:
require debt relief companies to make disclosures to consumers;
prohibit them from misrepresenting their services; and
extend the Telemarketing Sales Rule to cover incoming calls consumers make to these firms in response to debt relief advertising.
Also, on October 27, 2010, for-profit companies that sell debt relief services over the telephone may no longer charge a fee before they settle or reduce a customer’s credit card or other unsecured debt.
The Final Rule does not cover nonprofit firms, but does cover companies that falsely claim nonprofit status. Over the past decade, the FTC and state enforcers have brought a combined 259 cases to stop deceptive and abusive practices by debt relief providers that have targeted consumers in financial distress. For more information about these consumer protections, click on this link.
