Consumer Law

FTC's Proposed Rules to Protect Consumers

By M. Stan Herring

The Federal Trade Commission has posted an article on their website that discusses how the organization is looking for public feedback about their "rules" that are supposed to protect consumers from deceptive and abusive debt relief services done through telemarketing.

In the Noticed of Proposed Rulemaking (NPRM) announced today, the Commission proposes amendments to the Telemarketing Sales Rule (TSR) that would:

Prohibit companies from charging fees until they have provided the debt relief services;
Require disclosures about the debt relief services being offered, including how long it will take to obtain promised debt relief and how much it will cost;
Prohibit specific misrepresentations about material aspects of debt relief services, including success rates and whether a debt relief company is nonprofit;
Extend the TSR to cover calls consumers make to debt relief services in response to their advertisements; and
Define the term ?debt relief service? to cover any service to renegotiate, settle, or in any way alter the payment terms or other terms of the debt between a consumer and one or more unsecured creditors or debt collectors, including a reduction in the balance, interest rate, or fees owed.

The NRPM discusses three major areas of debt relief: credit counseling, debt negotiation and debt settlement, as well as the abuses associated with each area. Law enforcement and the FTC's efforts to curb this abuse are also discussed.

TSR requires disclosure and

prohibits misrepresentations during telemarketing calls.It also bars abusive practices, including
charging up-front fees for certain services such as credit repair, recovery services, and offers of a loan or other extension of credit when granting it is ?guaranteed? or is represented as having a
high likelihood of success. The TSR was amended in 2003 to create the National Do Not Call Registry and again in 2008 to curtail telemarketing calls that deliver prerecorded messages.

If you have had any problems with creditor/telemarketer harassment, feel free to contact us.

Full post as published by Alabama Consumer Blog on August 15, 2009 (boomark / email).