New Debt Settlement Law 2010
Companies that promise to reduce or eliminate credit card balances and other debt for customers will no longer be allowed to charge an upfront fee. This new law goes into effect Oct. 27, 2010.
The Federal Trade Commission said that the new rule is intended to crack down on the debt settlement industry. The FTC alleges that debt settlement companies caused the consumer’s debt to increase with interest and late fees due to no-payment to creditors.
However, the FTC failed to mention that most consumers have already stopped paying on credit card and other unsecured accounts due to financial hardship and becuase of ridiculous interest rates imposed by the banks.
This law was simply designed by the banks to put debt settlement companies out of business so they (the banks) can continue to take advantage of consumers.
However, consumers seeking debt negotiation services can continue to work with an attorney or law firm that handles debt negotiation matters, as legal practitioners are not effected by this new law.
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