InfoBytes, October 29, 2010 - Weekly In-depth review of news & developments in the financial services industry

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Topics In This Issue

• Federal Issues

• State Issues

• Courts

• Firm News

• Mortgages

• Consumer Finance

• Litigation

• Criminal Enforcement Action

Excerpt from "Federal Issues"

FTC Defers Enforcement of Rule Banning Advance Fees as to Tax Debt Relief Services. On October 27, the Federal Trade Commission (FTC) issued an enforcement policy statement deferring enforcement, for tax debt relief services only, of a rule prohibiting companies that sell debt relief services over the telephone from charging advance fees. Under previous changes to the FTC’s Telemarketing Sales Rule (the Rule), which became effective October 27, debt relief companies may not collect fees before settling or reducing a consumer’s credit card or other unsecured debt (as reported in InfoBytes, October 22, 2010). Certain tax debt relief services raised concerns about whether the Rule applied to them, and argued that it did not because tax debts were not unsecured. The FTC announced that, while considering the tax debt relief services’ concerns, it will defer enforcement of the Rule as to tax debt relief services until further notice. The Rule will be enforced as to all other debt relief services within the scope of the Rule.

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