Debt settlement business is rampant in America. Equally rampant is settlement scam by fraudsters. Debt stricken people enroll in settlement program with the hope that they will get debt relief following their programs. But, many times we hear complain from consumers that after availing debt settlement programs, they have actually increased their debt burden. So, FTC has instituted some set of rules to check the unethical practices of Settlement Company that are out to fleece the innocent debtors.
FTC has initiated some stringent regulation here. According to FTC, no can charge you upfront fees. When any agency asks you fees even before evaluating your financial status, you can rest assured that they are doing illegal job. FTC has clearly stated that they can charge you only after
settling your debt.
A settlement company should also intimate a consumer about the possible degree of success they can bring in this particular case. They have to frankly tell a consumer about how much debt they can forgive after negotiating his creditors. They should tell them only on the basis of their past track record of success. And they should not give any false assumption to the consumer based on any of their exceptional previous performance. So,
the rationale here is that a consumer should get the promise which can only be fulfilled by the settlement company.
When a consumer enrolls in a settlement firm, they can charge you monthly consultancy fees. But, if the company can not reduce any amount of debt+, it should refund money to the consumer.
In the above paragraphs we have discussed what FTC has done regarding debt settlement business. Now let us see what laws FTC has instituted to prevent unethical practices with the debt collection business.
If you are facing harassing collection calls at odd times, you can take legal action against the collection company. FTC has initiated FDCPA laws which state that
1) No collection calls can be made before 8 am and after 9 p.m.
2) Using abusive language over tele-phone is strictly prohibited.
3) Using any mail, unauthorized letter with envelope carrying suggestive language is prohibited.
4) A creditor or its collection unit cannot misrepresent or falsify the status of the debt.
5) If they say that they are going to sue against a debtor but actually they do not do it in reality, it will still be considered to be illegal.
If the laws are violated in any way, you do not require being proactive to prove that the laws have been violated. Rather, if the laws are broken any way, the laws will effect on the creditors and Collection Company.
