Protect yourself from the scams of Debt Settlement Companies

Protect yourself from the scams of Debt Settlement Companies

Debt settlement has recently come up as the best option for debt relief, but very few among us are able to gauge the genuine debt settlement company from among the many in the market. A fraud set-up can make your financial conditions worse but there is no need to hit the roof as yet! The new guidelines from The Federal Trade Commission provide a more secured program for settling consumer debts. A majority of the debt problems have surfaced due to recession, followed by job layoffs and unemployment. Credit card have come up as the only option of an average consumer to survive the financial drought and to combat the surging costs as a result of which, more people have sunk in deep debts and for each and all of them, getting rid of those dreadly debts have become the principle goal. But often these companies are more famous for shams and scams rather than debt relief. However, with the advent of these new rules more Americans will finally breathe a sigh of relief.

According to the new guidelines of FTC, it is mandatory for all debt settlement companies to disclose certain necessary details to the consumers like:

• The realistic time frame within which they will achieve the debt free status,
• The fees required to be paid,
• Implications of debt settlement on their credit charts,
• Clarity on the settlement fund,
• Advance fees charged, and
• Success rate should be disclosed.

Further to this, the debt settlement companies would be liable to face serious consequences if falsified information is given pertaining to their actual services or terms or any other manipulation, which could in any way deviate the consumer’s attention from these wrong deeds. However, the ban on charging upfront fees will come into effect starting October 27^th, 2010. But on the flip side, these new regulations are applicable to firms and agencies which are rendering their debt relief services through telephone and not to those which deal with the consumers in person or, for online debt settlement services. The Federal Trade Commission is hopeful enough of covering the entire debt settlement industry under these regulations as consumer is more prone to calling these agencies initially through the media advertisements. But it is definitely on the part of consumers to contact these agencies to ensure about the legitimacy and the validity of their services and to get a breather from their debts.