FTC Rules Will Put Debt Settlement Companies Out of Business

By October 2010, new FTC rules will prohibit debt settlement companies from collecting fees on the promise they will reduce or settle a consumer debts. The rules are necessary because the debt settlement companies falsely advertise they can drastically reduce consumers’ debts by negotiating with the consumer’s creditors. The companies demand and get thousands of dollars in fees even though they do not accomplish anything. Consumers often pay the fees and end up in a worse position than when they started. The new rules should put these companies out of business. Query–why did it take the FTC so long to...


Court Holds Statute of Limitations for Telephone Bills is Only Two Years

A federal statute, 47 U.S.C. Section 415 (a), provides that the statute of limitations for civil actions to collect on unpaid telephone bills is two (2) years. Most state statute of limitations are much longer. California’s statute is four (4) years for debts based on contracts. New York’s law is six (6) years. In an interesting decision, a trial court in Queens County, New York, recently held that the two year federal statute preempts state law. If the decision is upheld on appeal, a significant number of collection actions involving telephone bills will be subject to dismissal. The key factual...


Sometimes A Splurge Is Good For Your Health

The economic pundits couldn’t disagree more on how to fix the economy. Most agree, however, that at least part of the crisis was due to consumer overspending and under-saving. Folks thought the equity in their houses would continue to rise forever, so they used that equity, often with disastrous results. But now the experts tell us that people have to start spending again (buy cars! go out for dinner!) so the economy will recover. It’s enough to make anyone feel guilty and confused about spending on anything that’s not an absolute necessity. But sometimes a small splurge is good for...


Capital One Settles With Identity Theft Victim

Capital One Bank and the credit reporting agencies (Equifax, Experian and TransUnion) recently settled with our client who was the victim of identity theft. It took years for the identity theft victim to get Capital One to stop trying to collect on the account it opened for an imposter. The story began when Capital One sent a pre-approved credit card application to our client at her former college apartment. Someone in the building got the application from the mail and used it to get a VISA card from Capital One in our client’s name. The imposter took $500 from the...


How To Handle Student Loan Debt? A New Website Provides Resources

Students graduating from college have a few months to savor their accomplishment before worrying about repaying their student loans. But what happens when they have problems making their payments? A new website, Student Loan Borrower Assistance, includes information on repayment options, avoiding and getting out of default, dealing with collections agencies, and much more. The website was created by Deanne Loonin, a staff attorney at the nonprofit National Consumer Law Center. She says “the site describes the rights and obligations of student borrowers in plain language, so that they can understand their options, and stand up for themselves.. In a...

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