Sweeping Changes In Debt Settlement Industry Come As A Result Of The Telemarketing Sales Rule (TSR) PDF Print E-mail
Written by Mark Brinker   
Tuesday, 26 October 2010 20:56
Effective October 27, 2010, the Telemarketing Sales Rule (TSR) will prohibit debt settlement companies from charging upfront fees before they settle a client's credit card debt for less than full balance. This advance fee ban states that the debt settlement company may only collect their fee *after* the debt has been successfully settled.
by MarkBrinker


Effective October 27, 2010, the Telemarketing Sales Rule (TSR) will prohibit debt settlement companies from charging upfront fees before they settle a client's credit card debt for less than full balance. This advance fee ban states that the debt settlement company may only collect their fee *after* the debt has been successfully settled.

The TSR will make debt settlement companies offer full disclosure to clients seeking help. These companies must disclose the various aspects of their services, such as the fact that the clients will continue to receive collection calls. Also, the debt settlement companies under the TSR have to state that no specific results are guaranteed. Finally, companies will have to disclose that the client's credit report will be adversely affected.

Debt settlement companies under the TSR will have to stop advertising that they can settle debt for pennies on the dollar, or that they can make the collection companies stop calling you. I'm sure you've seen their ads on TV, radio and in magazines.

With the difficult economy of the past few years, many people found themselves facing serious financial difficulties for the first time in their lives. I'm talking about good, honest, decent people not being able to meet their financial commitments. My phone consultations with these folks often began with, "Mark, I never thought in a million years that I would not be able to pay my bills ... ".

These people were feeling helpless, and they needed a lifeline. Unfortunately, certain predatory debt settlement companies saw a way to take advantage of people. They conjured up debt settlement programs that overstated their abilities to help people, and ultimately took their money.

The way that these companies got their hooks into people is by charging an upfront fee for their services. People might not have been able to afford this, but they were desperate to save their credit and to stop the collections activities. So they did what they thought they had to do.

As an aside, I normally don't think it's a good idea for government to stick their noses in private affairs. However, too many people were being taken advantage of, and lied to. They counted on these debt reduction services to help them out. Now under the TSR, these types of borderline activities can be stopped.

I've been in this industry since 1995. I know of a lot of great and reputable debt relief services available. These services can be obtained at rates that are fair and reasonable to the consumer. Just because people need professional help doesn't mean that they deserve to be preyed upon, and this new law will help to protect those that need it the most.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Mark Brinker is an expert on credit card debt solutions. Please check out his website to access his free videos where he answers the most common questions concerning credit card debt settlement.