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The attorneys general of Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wyoming have all asked the Federal Trade Commission to increase the regulation of companies that have been offering debt relief to individuals and families in the United States.

One of the things that the FTC is currently considering imposing on the debt relief companies is to include them in the Telemarketing Sales Rule.

One wrong step from the Credit Solutions of America company led to the actions being filed. The company has been falsely claiming that it could reduce credit card debt by 50%. This angered Illinois Attorney General Lisa Madigan enough to sue the company and its CEO. In the lawsuit, Madigan states that Credit Solutions of America never go through with their end of the bargain and never actually negotiate with the creditors of their clients even though the clients stop paying their creditors directly and are actually making payments to Credit Solutions of America. Of course, because the creditors aren’t getting their money, they are suing the consumer to get their money; and winning.

Madigan has also said that her office has received over 12,000 complaints regarding this issue.

Some of the rules that the FTC is considering imposing on the debt relief companies include:

- Prohibiting the companies from charging the consumer anything until services have been performed. This would also require more disclosure to consumers; including how long it will take to settle the debts and how much it will cost.

- Prohibiting the company from being able to misrepresent things such as fees, success rates, and any other information that alludes to the impact of the debt relief services on the consumer’s credit report and credit history.

Some debt relief agencies actually do what they say they are going to do, but other companies like this one listed in the lawsuit above are awful and need to be regulated. The companies that do what they state they do shouldn’t have an issue with the new regulations that are imposed on them. Because the companies already follow the rules, any new rules will just mean that it’s leveling the playing field for the good companies.

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Jeremy

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