The Federal Trade Commission has made arrangements to enforce stricter rules that will target Dallas-area debt relief firms that claim to help those with a significant amount of debt. Charles Harwood, FTC Deputy Director of Consumer Protection, says that federal investigators have filed a lawsuit against Financial Freedom Processing and Debt Consultants of America, claiming that both companies “lured consumers nationwide into paying thousands of dollars in up front fees, but failed to reduce credit card debts as promised.”
The FTC’s investigation revealed that the Debt Consultant Company was dishonest to their clients, made many deceiving promises of eliminating up to 60 percent of a client’s debt, although they never provided any proof that they actually did this in any case. Charles White, a former Debt Consultants of America client claims he was informed after 8 months of making payments to the company, that none of his debt had decreased and the payments he had been making were all being used towards administrative fees.
Charles White claims that he attempted several times to the call the firm to see the progress on his debt reducing case, but they did not return a single call to him.
As of October 27th, the FTC has enforced that all debt relief firms must release all information regarding a client’s debt relief plan and are now prohibited from collecting advanced fees of any sort. The new enforcements also specify that the debt collection firms cannot collect fees until at least one of the client’s debts has been successfully settled.
Source: Grant Stinchfield / NBCDFW.com