It is estimated that the total household debt in America is now at $11.4 trillion. With such a lucrative market to find people in need of help, the number of debt relief scams have increased. However, new debt relief rules were introduced by the Federal Trade Commission in 2012 in order to better protect consumers and eliminate unscrupulous debt relief companies.
Rules For Review
The change to the debt relief laws included some key aspects for companies offering help to consumers. First, any company operating to provide debt relief services is prohibited from collecting payment until a written letter of approval from the creditor is obtained. Also, full disclosure is required, specifying how long the debt negotiations could take place and to offer realistic claims for relief.
The good news is a huge reduction in scams has been directly correlated to the implementation of these new rules, but debt burdens are still hovering around all time highs. Now what? The FTC acknowledges that consumer education about debt relief solutions is still needed. Many people don’t understand the ins and outs of debt settlement, consolidation or even bankruptcy options. Finding legitimate help is another problem, as many people are now skeptical of many debt relief service providers. Anyone looking for quality debt relief help are encouraged to speak with an attorney or review resources provided by the Federal Trade Commission.