The FTC just posted a new list and you’ll want to make sure you don’t land on it.
It’s a list of hundreds of companies and individuals banned from the debt relief business.
If your company is a for-profit entity that offers consumers help with debt, chances are you must comply with the Telemarketing Sales Rule (TSR) or the Mortgage Assistance Relief Services Rule (MARS) – and maybe even both. It depends on the type of debt you deal with. Assistance with unsecured debt, like credit card debt or student loans, falls under the TSR, while mortgage assistance relief falls under the MARS Rule.
Regardless of what rule applies to your business, there are two bedrock prohibitions:
- You can’t take up-front fees; and
- You can’t misrepresent your services or the results consumers can expect from working with you.
Both rules also require that you provide consumers with certain information about your services.
You can see the consequences of flouting those principles in law enforcement actions announced yesterday – two complaints against companies the FTC and the Florida AG say deceptively peddled student loan debt relief services and a settlement with an outfit that pitched bogus mortgage relief and student loan debt relief.
If you don’t comply with the law, you might find yourself looking for another line of work. At the FTC’s request, courts have banned hundreds of people and companies from the mortgage assistance and debt relief services industries. Check out this list to see who’s been banned. It includes links to press releases and court documents in the lawsuits that led to the bans. As you can see, the FTC has been cracking down on illegal practices in these industries. We’ve sued over 500 companies and individuals who broke the law, resulting in almost 300 bans and hundreds of millions of dollars in judgments.
Even if you don’t provide mortgage assistance or debt relief services directly, but you work with those who do, you should still review the list. That way, you’ll know whether the person or company seeking your services is banned. If they’re on the list, run the other way. Under the TSR and the MARS Rules, it’s illegal to help others commit violations. So lending a hand to the wrong kind of client could put you on the wrong side of the law.
Want to help keep your company in compliance? Visit the Business Center’s Credit & Finance portal for resources.