New Rule: No “Up Front” Fees for Debt Settlement Companies & 3 Things You Need to Know About It
Las Vegas debt settlement agencies taking your money and running? Well, the Federal Trade Commission recently issued new rules that prohibit debt settlement companies from charging up-front fees.
Here are 3 things you need to know about the new rule:
1. Only pay for results. Debt settlement companies can’t require you to pay anything until they have showed you—in writing—how much your debt will be reduced. And to do this, they must show you agreements they’ve negotiated with your creditors so you can see exactly what’s going on. Only at that time can they ask you for their fee.
2. Only applies to telemarketing. All of this sounds potentially helpful, but be careful. These new rules only apply to telemarketing (because that’s the only way the FTC has jurisdiction to regulate it). So if a representative of a debt settlement company meets you in person, they can legally try to charge you up front fees. (Though if you’re reading this blog, you should now know not to ever pay up front fees to a debt settlement company.)
3. Watch out for fake law firms. Lawyers are not affected by this rule since lawyers meet in person. As a result, some unscrupulous debt settlement companies have posed as law firms. If you work with a lawyer, make sure you learn about their history. Make sure they’ve been around a while. If you’re not sure about their legitimacy, ask them if you can talk to other clients.
Of course, the real solution to the problems with debt settlement companies is to just plain avoid them. They’re bad news and more likely to hurt you than to help you.
If you need good Las Vegas debt help, contact an experienced Haines & Krieger attorney at 702-880-5554 for a free initial consultation. We’re a part of the Las Vegas community, we’ve been helping Las Vegas residents with their debt problems for a long time and we will continue to do so.