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Reining in the Debt Settlement Industry

May 11, 2010 - by Donny Shaw

As the financial crisis turned into an economic crisis, people began losing jobs and personal debt exploded, television and radio ads promising to help you settle your debt for a fraction of what you owe have became more and more prevalent. Not surprisingly, the growth of debt-settlement industry is mostly predatory in nature, and in some cases their business models are outright fraudulent.

Sen. Charles Schumer [D, NY] recently introduced a bill to rein in these companies, called the Debt Settlement Consumer Protection Act. It would create new disclosure requirements in customer contracts, prohibits a number of abusive tactics, limits the fees companies can charge customers, and more.

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