Better Business Bureau: Law prohibits debt relief companies from making false promises to consumers
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By Alan Bligh
I want to take the opportunity first to thank Cindy Cornish and Cheryl Moore with the Area Agency on Aging of the Golden Crescent for inviting BBB to participate in their recently held fraud seminars for seniors. As you may recall, BBB and AAA have a formal agreement of cooperation designed partly to warn seniors and their caregivers concerning scams and bad deals. The seminars were held in Victoria, Port Lavaca and Yoakum.
Often I have mentioned the problems with debt relief companies. Their promotions are flashy, but too often they make things worse for the poor consumer who is already in financial trouble. Now, great news. New amendments to the Federal Trade Commission's Telemarketing Sales Rule has taken effect, prohibiting debt relief companies from making false promises to consumers. The new rules apply to for-profit debt settlement, debt consolidation and debt counseling companies and will serve to help inform consumers of the services offered prior to payment.
This year, BBB has processed nearly 3,000 complaints nationwide against debt relief companies, alleging that the companies often charge large advance fees, fail to reduce debts or misrepresent their services. The FTC rules will require companies to disclose information that is intended to help prevent such complaints. The following rules are the major additions to the FTC TSR as of today:
Debt relief companies are now required to disclose to consumers how long it will take to see results, how much their service costs and any negative consequences that could occur from using their services.
Companies may not misrepresent their success rate to consumers or falsely claim they are a non-profit organization.
In addition to calls made to consumers by debt relief companies, calls made to debt relief companies in response to advertising will also be covered by the Telemarketing Sales Rule. This item will make it very difficult for the less than honest companies to function.
Also please note that as of Oct. 27, all for-profit debt relief companies will be prohibited from collecting advance fees for their services. Before seeking help from a debt relief company, BBB recommends that consumers consider the following options:
Research the company with BBB at bbb.org
Contact lenders first
Seek help from a non-profit credit counseling center
By now most of us know about those disclosures on food products that tell us what is in the product, how many calories, etc. Important stuff. But it still amazes me that so many of these are rather tricky or deceptive. Take the new Log Cabin all natural maple syrup that comes in a nifty little jug. All natural? Yes, it does contain maple syrup a whopping four percent. My favorite is the moon pies I used to love. They were huge and tasty. I really liked the fact that the label said 300 calories per serving. That's right. In this case a serving was one half moon pie. Thus I was chucking 600 calories with each pie. Who eats one-half a moon pie? What a rude awakening. Now I never read the labels without noting what the company defines as a serving. Watch out especially for soup labeling. The soups you take to work to heat in the microwave. Yep, two servings.
Alan Bligh is the executive director of the Better Business Bureau in Corpus Christi. Contact him by e-mail at firstname.lastname@example.org.