NOTE: On October 27, 2010, the Federal Trade Commission (“FTC”) issued an enforcement policy statement on the Debt Relief Service Amendments that were added to the Telemarketing Sales Rule. The FTC says “that while most companies that sell debt relief services over the telephone are now prohibited from charging fees before settling or reducing a consumer’s credit card or other unsecured debt, it will defer enforcement of the new rule for tax debt relief services.” The enforcement policy states, however, that tax debt relief services must comply with the FTC’s Telemarketing Sales Rule, except for the debt relief amendments, during the enforcement deferral period. The FTC also reminded providers that they must comply with the FTC Act, which prohibits unfair and deceptive practices. The FTC’s Enforcement Policy on Debt Relief Amendments to the Telemarketing Sales Rule can be found on the FTC website.
The National Policy Group and the Venable LLP law firm will host a complimentary webinar on October 5, 2010 at 3:00 pm ET on the new federal regulation of Tax Resolution Services by the Federal Trade Commission (“FTC”) through the amended Telemarketing Sales Rule (“TSR”).
The webinar will review the history of the TSR, the content of the TSR, the application to tax resolution services, and a proposal to remedy the inclusion of tax resolution services as debt relief services providers in the TSR.
Background
The FTC recently published its final rule amending TSR. The TSR is very broad in its coverage and, according to the FTC, now applies to tax resolution services. Under the amended TSR, starting on October 27, 2010, it will be “…illegal to charge upfront fees. You can’t collect any fees from a customer before you have settled or other¬wise resolved the consumer’s debts.” Other amendments to the TSR took effect on September 27, 2010. Anyone who violates the TSR is subject to civil penalties of up to $16,000 per violation. In addition, violators may be subject to nationwide injunctions that prohibit certain conduct, and may be required to pay redress to injured consumers.
The TSR now defines a “debt relief service” as a program that claims directly, or implies, that it can renegotiate, settle or in some way change the terms of a person’s debt to an unsecured creditor or debt collector – including tax debts. That includes reducing the balance, interest rate or fees a person owes. The TSR defines “telemarketing” as a “plan, program, or campaign…to induce the purchase of goods or services” involving more than one interstate telephone call. The TSR encompasses all forms of advertising, including Internet, web pages, television, radio, and direct mail.
The TSR contains specific requirements for debt relief service providers related to the charging of fees before providing any services. It specifies that fees may not be collected until:
• the debt relief service successfully renegotiates, settles, reduces, or otherwise changes the terms of at least one of the consumer’s debts;
• there is a written settlement agreement, debt management plan, or other agreement between the consumer and the creditor, and the consumer has agreed to it; and
• the consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt relief provider.
How to register for the webinar
There is no charge to attend this webinar. To attend, simply register at the following URL (cut and paste into your browser for easier use):
https://student.gototraining.com/67q2t/register/5323663007463755008
If you have any questions or require any additional information about the webinar, please e-mail the National Policy Group at Info@NationalPolicyGroup.com.