Now You Know the Debt Settlement Industry is in Trouble When Alaska Cracks Down
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Alaska, otherwise known as the last of the rough and tumble frontiers in America, is often the last bastion of lawlessness. Have you watched the Alaska State Trooper television show?
A story by KYUU in Alaska made me chuckle. Apparently Alaska is outraged by the actions of debt settlement companies that are charging up-front fees.
Alaska’s attorney general has joined a group effort to crack down on questionable debt settlement services.
Forty states sent out a letter pushing for changes being considered by the Federal Trade Commission to better protect consumers after an increase in complaints.
Across the nation, it’s clear that times are tough, so more consumers are trying to reduce their financial stress by reducing debt and going to those who are supposed to know best.
“With the recent economic problems there has been a shift by some unscrupulous operators to cash in on people’s problems, essentially,” said Cindy Drinkwater, the assistant attorney general.
That’s why the Attorneys General sent out a joint letter to the FTC that supports the commission’s move to change rules for debt settlement companies, targeting their work on TV, radio, the Internet and via telephone
“(To) prohibit certain kinds of conduct such as requiring up-front fees or advance fees,” Drinkwater said.
The change would also make it illegal for a company to engage in a variety of deceptive unfair representations and practices.
Making promises they can’t keep would be one example. Some claim all collection calls will cease, when actually, in many cases the creditors are never notified that a settlement is in the works and continue to demand full payment.
“Ultimately the problem is that consumers will end up in a much worse financial position because they’ve had to pay these up-front fees. Meanwhile, the interest on their debts has accrued (and) collection efforts continue. Ultimately they may be facing judgments against them,” Drinkwater said. Source
Source: Now You Know the Debt Settlement Industry is in Trouble When Alaska Cracks Down
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