ConsumerCents - Keep Your Change: 9/1/2010 Issue

Financial Knowledge is Power

New Debt Settlement Rules

The FTC has issued new rules pertaining to for-profit companies that provide debt settlement services and the fees that can be charged to customers receiving these services. These new rules apply to for-profit debt relief companies as well as telemarketers of these services. The ruling comes on the heels of hundreds of cases pursued by the FTC to stop abusive practices by unscrupulous companies masquerading as resources for legitimate debt relief.

Debt Settlement is the negotiation and settlement of unsecured debts by a company for a fee. In this process a creditor agrees to accept less than the full amount owed yet still consider the balance as paid. Settlement companies often advertise that they can negotiate reductions of 50 percent or more of the unsecured debt a person owes. They then set up a repayment plan that generally takes two to four years to complete.

The most sweeping of the new FTC rules bans debt settlement and other relief providers from charging fees in advance of providing any services. Prior to the new regulations, for profit entities could charge enrollment or other similar service fees prior to actually doing any work on the customer's behalf. Starting October 27, 2010, this common practice is no longer allowed.

Specifically, service providers cannot charge a fee until at least one successful change in credit terms is reached, there is a written agreement for the action in question, and at least one payment is made by the customer under the new credit terms.

In addition to the new fee regulations, other disclosure mandates will take effect on September 27th that the FTC believes will better inform consumers about the services they are receiving and the potential associated risks. Click Here to see the ruling in its entirety.

If you or someone know are looking for new strategies to eliminate debt, take some time to visit with one of our Certified Financial Counselors to review all your options and get a clear picture of the pros and cons for each option. Call toll free, 800-351-4195 or visit us online at FairCredit.org. There is no cost for consulting with our counselors about your debt relief options.

Hot Topics & Industry News

ConsumerCents: Organizing Personal & Financial Records

September is a great month to take some time to organize or reorganize your personal and financial records. The Summer vacation season has come to an end and the kids are back in school, leaving you with some time to concentrate on a few things you may have on the back burner.

Having organized records can be a lifesaver in times of emergency or other instances where you need information at your fingertips. It also provides a way for family members or other designated individual to find records on your behalf if needed. Having a good and consistent system for filtering, filing and storing those records is the key to stress-free access in a pinch.

AAA Fair Credit Foundation is hosting a FREE workshop on September 22, 2010, in Salt Lake City, UT, specifically on how to create and maintain an organization and storage system for all your important documents. In this workshop we will discuss what you need to keep and for how long, what you can toss, and different methods for filing and storage to keep your sensitive information secure.

This workshop is free to attend; however, space is limited and registration is required.

If you are outside the Salt Lake and surrounding areas, you can download our free Organizing Personal and Financial Records guide at ConsumerCents.com.

Did You Know...

Admongo.gov is a new initiative by the Federal Trade Commission to educate tweens (kids ages 8 to 12) about advertising so they can become better educated consumers, and therefore, more discerning about where they choose to spend their own money. Through game play, classroom, and home applications, Admongo aims to educate tweens in analyzing commercial messages and differentiating them from non-commercial messages. Get all the resources and details at Admongo.gov.

The Wishing Well

Meet Sandra

Sandra is the winner of Imagine a Happier You's financial makeover in the Debt category. Over the next year, Sandra will be working closely with AAA Fair Credit Foundation on her goal to get her family out of debt and back on stable financial ground and chronicling her experiences online.

Imagine a Happier You is an initiative created to help women achieve financial freedom through an engaging and interactive campaign. Sponsored by Deseret Media Companies in partnership with AAA Fair Credit Foundation, Zions Bank, and Merrill Lynch, three women have been chosen to receive financial makeovers in the areas of budgeting, debt elimination, and investing/financial planning.

Over the course of the next year, these women and their sponsoring mentor will chronicle each winner's progress via online tracking, blogging, and other events hosted throughout the year. Their end results will be unveiled at a personal finance event to be held August of 2011 in Utah.

Click Here to read Sandra's story. Don't forget to leave your feedback, tips, and check back often to support Sandra in her quest to become debt free.

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