Illinois Attorney General Lisa Madigan is backing legislation to ban debt-settlement companies from charging upfront or monthly fees and that caps payments to firms promising to reduce credit card debt.
The legislation would cap fees at 5 percent of the savings resulting from settling a debt, rather than a percentage of debt enrolled. It also would allow cancellation of a debt-settlement contract at any time and require prompt refund of fees; prohibit companies from advising consumers to stop payments to creditors; ban deceptive marketing practices and require companies to be licensed through the Illinois Department of Financial and Professional Regulation. The bill is sponsored by Rep. Marlow H. Colvin (D-Chicago). – SourceDebt Settlement Legislation to Prohibit Up-Front or Monthly Fees and Cap Fees at 5% by Steve Rhode