What Records have to be Kept in the FTC's New Telemarketing Sales Rule?
Under the new Rule, any debt settlement, debt management plan or other debt resolution plan from a creditor must be in writing. You must keep these documents for at least two years. The type of documentation depends on the services you provide. Examples of acceptable documentation include:
• For credit counseling – a debt management plan containing the new terms binding on all applicable creditors and debt collectors, with evidence that the customer has made the first payment.
• For debt settlement – a letter or receipt from the creditor or debt collector stating that the debt has been satisfied and the amount of the payment received, or other documentation that contains a specific settlement offer from the creditor or debt collector and evidence of a corresponding payment to the creditor or debt collector.
• For debt negotiation – a written document from a creditor or debt collector stating that it has agreed to a concession – for example, a lower interest rate for a credit card – with evidence that the customer has made at least one payment under the new terms.
You have to retain documentation of all fees you collected from each customer. It’s a good practice to give them copies of all paperwork as well.
Savvy businesses know that it’s best to get a customer’s written approval for all debt settlements. The new Rule recognizes there might be an exceptional case when a customer’s oral agreement will have to suffice – for example, if a creditor offers a very favorable settlement available only for a limited time. But oral agreements should rarely be used. Indeed, members of the debt settlement industry should be careful not to pressure customers to act without taking time to think over their decision. Keep in mind that it’s risky to rely solely on oral communications. If you get a customer’s oral agreement, it’s wise to write a note to that effect, keep it on file with the creditor’s written agreement, and follow up in writing with your customer.
For more information, see here: http://www.business.ftc.gov/documents/bus72-debt-relief-services-telemarketing-sales-rule-guide-business
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