What are the Best Practices in the FTC's New Telemarketing Sales Rule?
In addition to adhering to the basic compliance requirements of the new Rule, providers of debt relief services may want to incorporate other practices to help their customers:
• Screen prospective customers for suitability. Debt relief programs aren’t right for everyone. For example, some people may have so many debts and so few assets that filing for bankruptcy is their best option. Set up reasonable written procedures to ensure that each customer is suitable for your program. What’s reasonable may depend on the type of service you offer and the results you promise. The bottom line is that you should have good reason to believe that the people you sign up are capable of making the payments associated with your program and are likely to complete it successfully, based on their situation when they sign up with you. Train and supervise your employees to make sure they’re following your procedures. Particularly if you pay your sales staff a commission based on how many people they sign up for your program, monitor them carefully to make sure they don’t misrepresent the service to potential customers. Review and update your procedures periodically.
• Keep your customers in the loop. Update your customers on the status of your negotiations and progress – including any important communications from their creditors. Tell them about any changes in their creditors’ policies that may affect how long the process will take or how much money it will take to settle their debts.
• Let customers communicate with creditors. You should allow your customers to contact – and be contacted by – their creditors.
• Tell customers about the tax consequences of the program. For some people, using debt relief services could have tax consequences. Depending on the customer’s financial condition, the amount of savings can be considered income. Make sure your customers are aware of the possible tax ramifications of using your services.
• Make sure your employees are complying with the Rule. Be sure to train and monitor them carefully to ensure they do not misrepresent your services to consumers. This is especially important if you pay your sales people on commission, based on how many customers they sign up.
For more information, see here: http://www.business.ftc.gov/documents/bus72-debt-relief-services-telemarketing-sales-rule-guide-business
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