Some consumer relief from shady debt-relief? FTC issues new rules

Some consumer relief from shady debt-relief? FTC issues new rules
Some consumer relief from shady debt-relief? FTC issues new rules

The Federal Trade Commission announced a broad set of new rules designed to curb the "deceptive and abusive practices" of a debt-relief industry that's mushroomed during the worst U.S. economic crisis since the Great Depression.

One new rule bans for-profit telemarketing companies that sell debt-relief services from charging advance fees -- which can range from hundreds to thousands of dollars -- starting October 27, 2010. More that take effect September 27, 2010, forbid debt-relief companies from making misleading claims and require them to disclose all fees and other aspects of services.

The rules cover telemarketers that sell credit counseling, debt settlement, and debt negotiation services. Although the new regulations do not apply to nonprofit firms, they also take aim at debt-relief companies falsely claiming nonprofit status.