The Federal Trade Commission (FTC), in order to maintain control over the debt-service industry, has enacted certain additional restrictions to the Telemarketing Sales Rule (TSR). According to FTC, these restrictions are essential to increase the agency’s control over the debt-relief providers.
However, the proposed TSR amendment applies only to for-profit debt-relief entities and not to non-profit entities. The amendments are meant to significantly expand the coverage of the TSR in various ways. It states that those profit entities that earlier were exempted from the TSR’s disclosure, are now required to act in accordance with the rule on incoming or outgoing calls.
“As a result, virtually all debt-relief telemarketing transactions would be subject to the TSR once the proposed modifications to the Rule are adopted.”- The FTC stated.
The new proposal seeks to concentrate on new additions. The debt-relief providers are required to make six additional material disclosures that are not followed by any other telemarketers.
The amendments that are included in the new disclosures are:
The FTC has also added amendments designed to protect consumers from false or misleading statements in order to gain clients. The disclosures debt solutions firms are prohibited from making include misstatements regarding the number or percentage of clients that have successfully used their services and the time the firm requires to obtain the desired results.
With these regulations, the FTC hopes to better regulate the debt relief industry and prevent consumer fraud in this tough economic climate.