Chicago, Illinois (PRWEB) October 25, 2010
New Federal Trade Commission rules mean that debt settlement companies must now disclose how much money customers will have to pay for their services and be truthful about how long the settlement process will take. This, according to Richard G. Fonfrias, J.D. of Fonfrias Law Group, LLC (http://www.chicagomoneylawyer.com), a leading Illinois bankruptcy and financial rescue lawyer, is a positive move towards ensuring truth and transparency in debt settlement and protecting consumers from deceptive debt settlement practices.
The Federal Trade Commission has found that complaints filed against debt settlement companies, citing abusive and deceptive practices, have risen a staggering 18% between 2008 and 2009. The vast majority of consumers complained about broken promises made by debt settlement companies and hidden fees associated with these services. Every day, many consumers are led to expect better, easier and much quicker results from the debt settlement companies than they could ever realistically receive. This is a problem in all states, but as a result of the recent housing market crisis, residents of Florida and California have been particularly hard hit by the broad claims of less than truthful debt settlement companies. Industry experts believe that these new Federal Trade Commission rules will help to remedy this troubling situation.
"Before these new Federal Trade Commission rules were announced, debt settlement companies could easily take advantage of consumers," states Fonfrias. "These new rules go a long way in protecting consumers from the unscrupulous debt relief companies who prey on people in serious financial difficulties." Fonfrias cautions, however, "the problem remains that the rules only apply to debt settlement companies that solicit business over the phone. Debt settlement companies that operated over the internet or offer face-to-face services are exempt from these rules. Consumers still need to do their research and trust that if an offer from a debt settlement company sounds too good to be true, then it probably is."
Later this month, there will be even more help for financially strapped consumers seeking debt relief from debt settlement companies. On October 27, 2010, the Federal Trade Commission will institute new rules that ban debt relief companies from charging upfront fees. Customers will no longer have to pay these companies in advance for their services. Payment will be due only after the customer's debt has been reduced or settled.
"While these new rules will go a long way in reducing fraud and curtail the deceptive practices of some debt settlement outfits, consumers are still not completely protected," says Fonfrias. "To protect themselves, individuals seeking the services of a debt settlement firm need to investigate the company before signing a contract. Consumers need to stay wary - there is still no infallible guarantee against getting burned in debt settlement."
Richard G. Fonfrias, J.D.
Fonfrias Law Group, LLC
First National Plaza
70 West Madison, Suite 1400
Chicago IL 60602
About Fonfrias Law Group: Chicago's money lawyer Richard Fonfrias of Fonfrias Law Group is ready to assist Illinois homeowners in serious financial trouble and consumers facing mounting financial debt. With eighteen offices serving Chicago and communities throughout Illinois, Fonfrias Law Group is Chicago's experienced financial rescue and bankruptcy legal team, offering all forms of bankruptcy legal services, tax defense, debt consolidation, bad credit repair, foreclosure defense, credit card debt management, loan and mortgage refinancing advice. For more information call 312-969-0730 or inquire on line http://www.chicagomoneylawyer.com
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