The Federal Trade Commission is rolling out new changes to the Telemarketing Sales Rule which can impact debt relief companies.
The last big update to the Telemarketing Sales Rule (TSR) significantly hit the debt relief industry and wound up closing down a number of debt settlement operations who were collecting advance fees.
The TSR is intended to fundamentally be an anti-fraud rule which hopes to protect consumers from deceptive and abusive telemarketing practices.
The new changes to the TSR may change the way your debt relief company sells services or collects payments over the phone. Changes would define and prohibit the use of four types of payment methods by telemarketers and sellers. These include “remotely created check,” “remotely created payment order,” “cash-to-cash money transfer,” and “cash reload mechanism.”
It would expand the prohibition against advanced fees for recovery services (now limited to
recovery of losses sustained in prior telemarketing transactions) to include recovery of
losses in any previous transaction.
When it comes to the elimination of the remote payment methods, only one telemarketing company came forward agains the ban. Seems like the telemarketing industry had no good defense to continuing to allow telemarketers to so easily reach into consumer accounts. These remotely created payments have been used to scam millions and millions of dollars out of the pockets of consumers.
The FTC documentation says, “While many commenters challenged the FTC’s assertion that the use of these payment methods in telemarketing causes or is likely to cause substantial harm to consumers, no commenter specified how or to what extent remotely created checks and remotely created payment orders are used in lawful telemarketing of legitimate products and services.”
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