New Regulations to Restrict Debt Settlement Forms Becomes Law, Now.

By on September 28, 2009
New Regulations to Restrict Debt Settlement Forms Becomes Law, Now.

Last year Attorney General Blumenthal in Connecticut fought to get new laws in place to protect consumers from debt settlement and debt negotiators that charge consumers and up-front fee to settle debts.

The law has the following provisions:

  • Obtain a Connecticut debt negotiators license and file a surety bond
  • Not refer to state licensing or bonding as an endorsement
  • Disclose 10-year criminal history on license application
  • Evaluate likelihood of success in reducing debt or saving a home before contracting with the consumer
  • Sign a written agreement with the consumer
  • Provide complete list of services, costs and results to be achieved
  • Perform services outlined in contract before charging fees
  • Adhere to fees regulated by the state banking commissioner
  • Allow a 3-day right of rescission for the consumer to cancel the contract
  • Comply with state law or have the contract voided and subject to enforcement

According to Blumenthal, the typical scam involves a consumer paying large upfront fees – often $1,000 to $3,000 or more – to a company claiming to negotiate with creditors to lower the debt. Instead, the firm takes the money, never applies it to the debt, and sometimes vanishes.

Typically, a “debt negotiator” is any individual or firm that assists a person in helping to reduce, manage or settle consumer or mortgage debt owed to creditors. These enterprises can refer to themselves as debt-settlement companies, debt-management companies, mortgage modification companies or even foreclosure rescue firms.

Connecticut already licenses so-called “debt adjusters,” but those individuals or firms receive and submit funds to a creditor without actually negotiating on the debtor’s behalf, said Marlene Mannix, assistant director of the consumer credit division of the Connecticut Department of Banking.

This new expanded law prohibits a debt negotiator from charging upfront fees, requiring the enterprise to perform services outlined in a contract first. Before a contract is signed, the debt negotiator is required to register for a state license and evaluate the likelihood of success in reducing debt or saving a home for the consumer.

Euro-Video – , ,

READ  Debt Settlement Company Success Rate Made Public - Sucks

Last step, fill out the information below or call us for Priority Assistance.

What problems are you having with your report?

Your first name is required. Your first name is required to be at least 2 characters. Your first name cannot be longer than 50 characters.
Your last name is required. Your last name is required to be at least 2 characters. Your last name cannot be longer than 50 characters.
Your email is required.
Your phone is required. Your 10 digit phone number is required.
Your state is required.
Your age is required. Your age must be greater than 18. Your age must be less than 100.

By clicking on the "Contact Me" button above, you consent, acknowledge, and agree to the following: Our Terms of Use and Privacy Policy and to receive electronic communications. We take your privacy seriously. That you are providing express "written" consent for Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS - charges may apply), even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list. Consent is not required as a condition to utilize Debt.com services and you are under no obligation to purchase anything.

By clicking on the “Contact me” button above, you consent, acknowledge, and agree to the following: (1)That you are providing express “written” consent for Lexington Law Firm, Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS – charges may apply), or dialed manually, at my residential or cellular number, even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list; and (2)Lexington Law’s and and Debt.com’s Terms of Use and Privacy Policy. Consent is not required as a condition to utilize Lexington Law or Debt.com services and you are under no obligation to purchase anything.

About Steve Rhode

Steve Rhode is the Euro-Video and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

Share a Comment / Leave a Reply

%d bloggers like this: