Kingcade Garcia McMaken
Set Up a FREE In-Office Consultation
Open Every Saturday Morning 8 AM to 11 AM.

Debt Relief Companies Bending the New FTC Rules - Part Two

In our last blog post, we discussed the increasing number of debt settlement companies choosing to skirt the new regulations provided by the Federal Trade Commission (FTC) in September. Today, we will look at how these companies are bypassing the rules and taking advantage of unsuspecting consumers seeking debt relief services.

How can companies get around the FTC's rules and avoid serious consequences? Many companies, aware that they are unable to engage in telemarketing to recruit new clients, have turned to other forms of advertising they claim fall outside of the telemarketing restrictions created by the FTC. For example, they often send text messages or use Skype or Internet chats to solicit customers. Further, a growing number of debt settlement companies are hiring attorneys or posing as a law firm, as the FTC regulations are not applicable to attorneys.

Further, some debt settlement companies are choosing to move their operations offshore, relieving them of compliance with the FTC's regulations. According to reports, there has been a surge in debt relief companies moving their operations to Bermuda.

What can be done to protect consumers from these unscrupulous companies? According to Evan Zullow, an FTC attorney in the division of financial practices, the FTC is aware of companies using loopholes to avoid the regulations. Zullow says the FTC is closely monitoring the situation. He stresses the fact that using text messages to coax potential customers to call for debt relief services is not allowed under the FTC rules. Rather, any company that uses advertisements or solicitations that prompt consumers to call for services is forbidden from charging upfront fees.

Consumers who are considering debt relief services should be especially careful and do their research about the company before enlisting their services. Also, it is important to remember that debt settlement is not always the most appropriate choice for consumers looking for debt relief.

Source: "Debt Settlement Companies Are Still Skirting New FTC Rules," 23 December 2010

No Comments

Leave a comment
Comment Information

Set Up A Free, In-Office Consultation

Open Every Saturday Morning 8 AM to 11 AM.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy


Firm Location

Kingcade Garcia McMaken
Miami, FL 33145

Miami Law Office

Firm Number Phone: 305-285-9100
Review Us