WHAT YOU SHOULD KNOW ABOUT A NEW LAW AFFECTING DEBTORS

Many Americans struggle to pay their unsecured bills. Some turn to businesses like Level Thirty Three that offer “debt settlement” services. Services like ours negotiate directly with creditors or collection agencies to accept less than the total balance owed by debtors. The Federal Trade Commission (FTC), the nation’s consumer protection agency, has amended a new Telemarketing Sales Rule (TSR) to add specific provisions to prevent deceptive and abusive practices associated with debt settlement services. While Level Thirty Three and many of our competitors have been and will always remain above-board, there are, sadly, some less reputable businesses that prey on struggling Americans. The new law is very clear, precise and direct on what is considered ethical. ALL companies must adhere to these new guidelines:

• It’s illegal to charge upfront fees. Debt settlement services can’t collect any fees from a customer before their debt has been settled or otherwise resolved. If they renegotiate a customer’s debts one after the other, they can collect a fee for each debt they’ve renegotiated, but can’t front-load payments. They can require customers to set aside money in a dedicated account for their fees and for payments to creditors and debt collectors. But the new rule places restrictions on those accounts to make sure customers are protected.
• Debt settlement services must disclose certain information before signing people up for their services, including: how long it will take for them to get results; how much it will cost; the negative consequences that could result from using debt relief services; and key information about dedicated accounts, if such accounts are use.
• Debt settlement services can’t misrepresent what they do. The new rule prohibits them from making false or unsubstantiated claims about their service.

Level Thirty Three has been doing business for more than 10 years. We comply with all applicable laws and do our best to educate and inform our clients on how these and any new laws might affect them. If you speak to a company that hasn’t provided any of the bullet points above, they may not be in compliance of the new law.