Up-Front Fees for Debt Relief a Scam, Consumers Warned

Franklin Debt Relief is warning consumers to avoid debt settlement companies that charge an up-front fee.

Wood dale, IL (prHWY.com) February 7, 2012 - Franklin Debt Relief is warning consumers to avoid debt settlement companies that charge an up-front fee. These fees are unlawful, after the passage of a new FTC rule. Effective October 27, 2010, the rule prohibits companies that sell debt consolidation and other debt relief services over the telephone from charging fees in advance.

Under the rule, debt relief services may not be charged for until:

- the debt relief organization successfully settles at least one of the consumer's debts or changes the terms of at least one debt
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- the consumer agrees to a debt management plan, settlement agreement or other plan or agreement with the creditor
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AND

- the consumer has made one or more payments to the creditor under the agreement negotiated by the debt relief service.
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The FTC instituted the new rule to prevent rogue debt relief organizations from taking advantage of consumers already struggling to pay their debts. FTC Chairman Jon Liebowitz said, "The rule change that goes into effect next week is a major victory for consumers struggling to control and manage their debt without inadvertently digging themselves in deeper."

Debt Settlement is concerned that consumers needing assistance with debt relief will fall victim to just such telemarketers as Chairman Liebowitz referred to when he said, "Starting on October 27, debt relief telemarketers are on notice - if you charge consumers before actually helping them, you will find the FTC and state enforcers knocking at your door to enforce the Rule. We look forward to working with our state partners to ensure that the Rule is enforced across the country."

Consumers struggling to pay their debts should understand this rule and have a clear idea of what is and is not allowable under the law.

However, consumers should not assume that they are now unable to settle their debts or that all debt relief agencies are fraudulent, Franklin says.

There are reliable, legitimate and trustworthy options for consumer debt relief. Many consumers have found help dealing with their consumer credit problems and reached suitable settlements. Consumers do overcome their debt challenges and become debt free.

The message is that any organization attempting to charge up front for debt relief services is breaking the law, and is likely to make any consumer's debt problem worse. While this particular technique has been targeted by the FTC, it is still important for consumers to seek out qualified, credible and reliable debt relief services.

Visit: Franklin Debt Relief --- Debt Settlement

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Tag Words: debt settlement

Categories: Finance

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