There is a lot of discussion on the internet about the new FTC regulations on how they might be a bit too severe.
Some state that things could have changed in other ways and if everyone reported the shady companies, things would eventually get better but this doesn't really seem like a good way to get debt relief.
Debt settlement is used by consumers in deep debt to reduce their financial problems after talking to the creditors.
There are some negotiations that need to take place between both parts so that they can agree to the percentage that will be reduced.
A consumer can get in touch with the creditor and explain why he cannot pay back his debt but the best thing to do is hire a professional settlement company.
These are professionals that know exactly what to say to the creditor and how to get a good deal because when it comes to debt settlement, experience matters and it can make the difference between a 40% reduction and a 70% reduction.
Like any other company, they will ask for a fee for the services they provide and this is where the problems used to happen.
Financial settlement companies used to ask for a great amount of cash in advance and this was usually the savings of the debtor.
This made a great environment for fake companies and so online debt settlement scams began to appear.
Soon, it became impossible for consumers to find a legitimate settlement company without coming across a few shady ones first.
The Federal Trade Commission decided to make things easier by preventing the companies from taking any upfront fees.
This might seem a bit drastic but it was a needed measure to make things more legitimate.
Fake companies disappeared and also small and inexperienced companies could not afford to function any more.
The remaining companies struggled a bit but if they keep proving good services, they will not be affected by these new FTC regulations in a bad way.
Online firms have now more reason to help consumers get out of debt and maintain a good success percentage.