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What Disclosures and Information is Required from Debt Settlement Providers?

Posted on: June 12th, 2012 by Editor in Debt Relief by Lawyer, Debt Settlement

Many American consumers who are in financial distress because they have credit card and other unsecured debts they cannot pay are looking for help. There are many debt settlement companies and other debt relief providers from which the consumer may choose.

The most important consideration for a consumer in making the right decision is to find someone or some company who is honest, capable, experienced, and will do what they say they will do.

This selection could be one of the most important financial decisions a person can make. In selecting a debt settlement provider the consumer must garner as much reliable information they can get. They need to know not only about the person or company they are considering, but about the process in general. They should know and understand how settlement of their debts can have not only positive effects, but negative as well. Be aware of anyone who will not provide full disclosure.

The Federal Trade Commission in its Sales Marketing Sales Rule promulgated and effective on October 10, 2010 issued certain prohibitions regarding misrepresentations that a debt settlement provider may make, as well as, requiring them to make certain disclosures.

Disclosures and Prohibited Misrepresentations:

Under the rule, providers must make several disclosures when telemarketing their services to consumers. Before the consumer signs up for any debt relief service, providers must disclose fundamental aspects of their services, including how long it will take for consumers to see results, how much it will cost, the negative consequences that could result from using debt relief services and key information about dedicated accounts if they choose to require them.

Among other things they must disclose possible tax consequences and how the process can affect the consumer’s credit rating. Moreover, they must explain their fee structure, tell the consumer how long it will take to get results, i.e. how long it will be before the provider will make an offer to each creditor, and how much money the consumer must save before an offer will be made to the creditor.

According to the “Federal Trade Commission, Facts for Consumers” there are certain warning signs that a consumer should be aware. You as a consumer should be wary of any debt settlement provider who:

  • charges any fees before it settles your debts
  • pressures you to make “voluntary contributions,” another name for fees
  • touts a “new government program” to bail out personal credit card debt
  • guarantees it can make your unsecured debt go away
  • tells you to stop communicating with your creditors
  • tells you it can stop all debt collection calls and lawsuits
  • guarantees that your unsecured debts can be paid off for just pennies on the dollar won’t send you free information about the services it provides without requiring you to provide personal financial information, such as credit card numbers, and balances
  • tries to enroll you in a debt relief program without spending time reviewing your financial situation
  • offers to enroll you in a Debt Management Program (DMP) without teaching you budgeting and money management skills
  • demands that you make payments into a DMP before your creditors have accepted you into the program

You can be assured that by using an Attorney at Law affiliated with Associated Attorneys you will get much more information than is required by law. There will be no exaggerations or misrepresentations. You will get full disclosure. For a licensed Attorney to do less is for them a violation of their professional obligation and their Professional Code of Ethics.

For more information contact Associated Attorneys, LLC at www.associatedattorneys.com or call toll free (866) 411-4693.

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