I typically get questions from consumers but I happened to get one from a company asking about new Federal Trade Commission regulations.
The questions was:
Will the new FTC and Schumer-McCaskill Amendment 3960 affect companies like mine that are use the attorney modle in all 50 states?
Will we be able to continue business as usual or will we have to comply?
Do the American Bar Association’s regulations superceed these new regulations?
I’m not going to name the company this came from but I have visited their site and it is very scant on specifics but it does look like a lead generating site for a financial solutions company.
The answer is that the new regulations do impact you significantly. There is no exemption for an attorney model and just to be certain, I had recently contacted the FTC for clarification. Attorney Allison Brown from the FTC responded and confirmed that position by saying, “There’s no exemption from the TSR for attorneys who engage in telemarketing, whether that attorneys’ main business is debt settlement or not.”
You also face liability in marketing debt relief services because you will need to make sure the end providers of the service you are selling for actually do comply with the telemarketing sales rules. As the guidance says, “If you work with debt relief companies, review their policies, procedures and operations to make sure they’re complying with the Rule. Willful ignorance isn’t a defense.”
Additionally, if you are making any claims to consumers based on the performance of the underlying service providers you better make sure they have provided you with accurate good faith estimates. You might want to read “The Debt Settlement Good Faith Estimate Guide for the Confused Consumer.”
Any regulations put out by the American Bar Association do not supersede federal regulations or laws.
Your best bet is to make sure you fully comply, there is no free pass and time is running out. The first phase goes into force September 27, 2010.
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Do you know if a Debt Settlement company compliant with FTC regulations is able to do business in states where currently only attorneys are legally able to provide debt settlement services (for exapmle NY, SC, GA, etc)
I can’t see how the FTC TSR would supersede any state requirement on licensing.
Steve