Steve Rhode, a consumer advocate as well as founder involving Getoutofdebt.org, any web site providi...

1. Debt settlement firms find ways around new FTC rules
Steve Rhode, a consumer advocate as well as founder involving Getoutofdebt.org, any web site
providing credit card debt relief advice, printed slides from an exhibition in which the Association
involving Settlement Companies, the credit card debt settlement sector group, gave at a current
industry conference.
What they're up to: A Amount Of debt-fixers tend to be baiting prospective customers with text
messages, mentioned Viale. the FTC, he said, will be closely monitoring your market to make "sure
in which what they're doing really meets your exception.". As extended because the consumer helps
create the initial call, several companies believe they're in any position to still cost upfront fees,
however this kind of behavior typically isn't exempt from your FTC rules, said Zullow.
Through Blake Ellis, staff reporterDecember 21, 2010: 5:19 AM ET
The firms are usually targeting prospective customers by means of text message, Skype or perhaps
Internet chats, or setting up in-person meetings with prospective customers, inside the belief that
will these techniques won't fall under U.S. Settlement companies must give actual in-person revenue
presentations if they want to collect upfront fees, according to the FTC.
"It's unfair to call for companies for you to supply a services with regard to several weeks as well as
a couple of months with out pay," she said.Â
And the manufacturer new guidelines haven't stopped all of them coming from collecting those up-
front fees.
Whether a financial debt settler's advert is actually about TV, radio or perhaps text, if the ad
prompts the consumer for you to call, the firms aren't allowed to cost advance fees, mentioned
Zullow.
While financial debt settlement companies are supposed to become able to negotiate with a
customer's creditors to end up being able to whittle on the amounts owed, some firms collect costs
amounting to be able to thousands of dollars with out building a dent in the customer's balance,
according towards the FTC, that regulates telemarketers.
Jenna Keehnen, executive director of united States Organizations pertaining to Bankruptcy
Alternatives, mentioned her trade team represented with regards to 200 such companies before the
new guidelines went into place, nevertheless just regarding one hundred companies possess
survived.
"Instead of complying with the new rules, nearly all debt settlement companies are usually evolving

2. for you to evade them," mentioned Chris Viale, CEO associated with Cambridge credit Counseling, a
new nonprofit consumer advocacy group. "They are likely for you to do every thing they're able to in
order to continue charging these advance costs to end up being able to customers as well as mislead
consumers."
Cambridge Credit Rating Counseling and 11 various other nonprofit credit card debt counselors
warned concerning several worrisome procedures in the letter for the FTC final week.
Evan Zullow, an attorney inside the FTC's division of monetary practices, stated he's conscious that
companies are looking for loopholes. Additionally they warn that debt-fixers could pose as lawyers or
hire attorneys, since lawyers are generally exempted from your rules.
Viale shared any text he said one of his organization's staffers received recently. The Actual text
inquired the staffer in order to contact to communicate having a credit rating analyst. CLG agreed to
stop soliciting new customers and collecting funds coming from existing customers, according
towards the attorney general's office.
The association, inside an interview using CNNMoney, stressed which TASC had certainly not been
suggesting its members evade the brand name new rules, yet was instead providing examples of how
other companies could end up being attempting to find around them.
Debt settlement companies may also move their operations offshore to be able to evade regulation.
Your Attorney General accused CLG associated with getting a new debt relief business posing as
being a law firm to be able to collect $2.6 million throughout service fees from greater than 3,000
customers within North Carolina.
"The presentation was handed inside anticipation associated with some gaps inside what the actual
law states as well as ways individuals might get around it," stated Wesley Young, legislative director
at the group, whom confirmed the slides were section of its presentation. Once the staffer referred
in order to as back, the rep requested if his credit card debt totaled greater than $10,000, said Viale,
then transferred him into a business it mentioned was a law firm that might cost the "retainer," an
up-front charge for legal services.
Federal Trade Commission guidelines that took impact this fall ban debt-fixers engaging in
telemarketing coming from misrepresenting their particular services, such as swearing to cut your
financial troubles by 50 percent whenever they can't, along with charging charges just before
services are generally delivered.
Whether the organization can be indeed a new law firm cannot end up being confirmed, however
credit card debt settlers hoping in order to skirt the newest guidelines are already pretending to
become backed by means of a legal firm or even hiring attorneys, stated Viale.

3. NEW YORK (CNNMoney.com) -- Several firms
that cost large upfront charges to shoppers
drowning indebted tend to be skirting new
federal guidelines that ban abusive debt-
settlement practices, according to consumer
advocates and also government officials.
The presentation in addition tossed about the
concept of utilizing Web chat and also Skype for
you to goal consumers.
But the up-front charges -- typically about 15%
or a lot more of a customer's outstanding debt -- really tend to be a crucial way to be able to obtain
revenue pertaining to financial debt settlement firms.
Simply hiring lawyers as well as calling the debt-fixing company the law firm, regarding example, or
even meeting with clients in Starbucks in order to sign paperwork won't cut it, he said. "We weren't
stating they should, i was explaining the real approach it functions and also what the legal
exemptions are."
One slide discussed basing operations overseas, "similar for you to online gambling setups," inside
the Dominican Republic, Costa Rica or perhaps Panama, noting that numerous payday lenders "are
now entirely based in Bermuda."
Weeks after the first batch associated with Federal guidelines banning deceptive procedures went
directly into effect, the actual North Carolina Attorney General sued the actual Consumer Law group
regarding Boca Raton, Fla. telemarketing regulations, your advocates said