Menu
Talk to a Bankruptcy Lawyer Today.
Evening and Weekend Appointments Available.
513-621-7902

So what are the consumer protection rules for debt consolidation companies?

Recently this blog reported a story on debt consolidation companies. In some cases, debt consolidation firms have made matters worse for Ohioans and people across the country. The recent story indicates that certain consumer protection laws are in place in an effort to control the practices of debt consolidation firms. After the Federal Trade Commission (FTC) finalized new rules several months back, some consolidation firms went out of business rather than attempting to comply. Many companies modified their practices to play by the rules. Other companies have sought loopholes or other claimed exemptions from the rules.

It is important for Cincinnati residents to understand their options when facing a mountain of debt. An experience Cincinnati bankruptcy attorney can explain the options available under the bankruptcy code to relieve debt. It can be tempting, however, to follow an advertisement from a debt settlement company, and it is important for Ohioans to know how the FTC rules operate to protect consumers.

Debt resolution companies are required to comply with these FTC rules:

  • Upfront fees are prohibited. Companies cannot charge customers until after they provide an actual service.
  • Services must be accurately represented. False advertising regarding the nature and extent of debt relief programs is prohibited.
  • Key aspects of the services must be disclosed. This includes a realistic timeframe for results, the total cost to the consumer and negative consequences of the debt resolution process.

The FTC hopes that the new rules will encourage debt relief companies to provide advertised services without taking advantage of consumers. The new regulations are designed to help protect consumers.

There are legitimate debt relief companies. Others, however, are hoping to collect fees without earning them. As a result, it is extremely important for consumers to be aware of how debt relief firms operate, their fee schedules and whether their procedures comply with the FTC regulations before they enter into an agreement with a debt relief firm.

For many Cincinnati residents a chapter 7 or chapter 13 bankruptcy may be the best option to deal with debt. A seasoned bankruptcy attorney can help to answer questions so that individuals can make informed decisions concerning what options are available.

Source: KNDO, "How new federal debt relief rules protect consumers," Andrew Houser 23 May 2011

No Comments

Leave a comment
Comment Information

Contact The Rose Law Office Today For A FREE Initial Consultation

Phone 513-621-7902
Fax 513-621-6402

Office Locations

The Rose Law Office
35 East 7th Street,
Suite 610

Cincinnati, Ohio 45202

Phone: 513-621-7902
Fax: 513-621-6402
Cincinnati Law Office Map

The Rose Law Office
6020 Cheviot Road
Colerain, OH 45247

Phone: 513-621-7902
Fax: 513-621-6402
Colerain Law Office Map

//