In the past, people could rarely turn on the television or radio without hearing some type of exciting news on how a credit settlement company could help them to reduce their debt fifty percent or more. However, people will no longer hear these types of advertisements due to the new debt settlement laws in place for the protection of consumers. Often, the advertisement offered people something they were never going to get.
In most cases, people had the unpleasant surprise of finding out that what had sounded too good to be true, was. Usually, this entailed the company making promises on how they were going to quickly reduce the debt the person had by negotiation or settlement. Most of the times, the promises made were nothing more than a sales tactic to get the person in the door. Usually, most of the customers did not find out that the company had no intention of following through on what they had promised until it was too late.
By the time, many of the consumers realized that it was going to take a lot more time and money than they were led to believe, people had already invested a lot of money. Some of the people finished the programs, while a large amount dropped out. Due to the new debt consolidation laws, credit settlement companies are no longer allowed to make promises that they do not intend on keeping. Generally, many companies of this type would make promises on how they were going to reduce the amount of debt that a person had up to fifty percent. Usually, this was never the case.
Most of the time, the cash settlement company did not disclose the fees that would come along with the process. In addition, many failed to inform them on how this type of thing could take years to do. Therefore, they could end up paying a lot more than they ever expected. Although some of the companies would work out deals that were fifty percent or less on the person's debt, often the person would end up having to pay a large amount of interest to the credit settlement company.
Therefore, the person would sometimes end up paying the debt settlement company more than the amount of their debt. Due to this, stricter debt settlement laws were put into place recently. With these new laws, a company no longer can lead people to believe they are going to do something when they have no intention on doing it. Instead, the companies now have to inform the consumer on the amount of time they should expect the settlement to take, in addition to the amount of money it will cost.
With the new debt settlement laws, companies are no longer allowed to mislead people into believing something that is not true. This means also that a company can no longer claim they are non-profit when they are clearly in it for the money.