FTC regulations too late for those tricked by debt settlement firms
The U.S. Federal Trade Commission passed new regulations earlier this month barring debt settlement companies from falsely advertising and collecting advanced fees.
However, the new rules could not come fast enough for some Maryland residents, who were victimized by a firm, promising to reduce their payments and help them avoid foreclosure.
The FTC recently took aim at Residential Relief Foundation, saying the company violated federal law with its promises to consumers, the news source says. In its investigation, the agency processed more than 60 complaints in 28 states across the country relating to the company, The Tuscon Citizen reports.
“Many families have been persuaded that debt settlement or mortgage modification is an easy fix that will make their debt melt away effortlessly,” Kim States, president of the Better Business Bureau, told the Citizen. “The truth is that there is no magic formula for debt relief.”
Overall, the announcement is the latest in a string of bad publicity for the debt settlement industry. The Better Business Bureau has received more than 3,500 complaints about misleading debt settlement companies in the last three years alone, according to the news provider.