Debt Relief Services and Telemarketing Sales Rules Guide for Business

Many Americans struggle to pay their credit card bills. Some turn to businesses offering “debt relief services” for-profit companies that say they can renegotiate what consumers owe or get their interest rates reduced.

New Debt Settlement Rules Applies to for-profit sellers of debt relief services and telemarketers for debt relief companies. The new Rule 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. That includes reducing the balance, interest rates 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. Most of the provisions of the TSR apply to sellers and telemarketers, so the terms “company” and “provider” in this Guide refer to both. In addition, certain parts of the Rule apply to those who provide substantial assistance or support to sellers or telemarketers.

New Rule for Debt Settlement Telemarketing Calls - The Telemarketing Sales Rule has covered a wide variety of telemarketing transactions since it was enacted in 1995, including the sale of credit repair services, products with a negative option feature, prize promotions and advance fee loans. Debt relief companies that initiate calls to potential customers or hire others to call people for them have always been covered by the TSR. The new Rule expands the scope of the TSR to cover many debt relief services in-bound calls (calls potential customers place to you or someone working on your behalf), in addition to outbound calls (calls you or someone who works for you place to potential customers). Here are some examples of the kinds of calls covered by the new Rule: