Debt relief companies are in hot waters, as new changes to the Telemarketing Sales Rule (TSR) will prevent them to charge upfront fees until they actually do something for the consumer, Wall Street Journal reported.The TSR provisions will be in effect beginning Sept. 27. Three rules apply: (1) debt relief companies are to let consumers know what will happen, (2) what it will cost, (3) and how long it will take including any negative consequences that might occur, the report said.The report also warned that consumers shouldnt get too comfortable with debt-relief companies once the rules take effect. While the rules cover credit-counseling, debt-settlement and debt-negotiation services, they do not cover nonprofit firms that offer those services, because the FTC lacks authority over them.Debt relief companies rose dramatically over the last decade. According to the Association of Settlement Companies, as reported by the Wall Street Journal, in 2002 there were only 8 debt relief companies. Now there are over 2,000 managing about $20 billion in credit card debt.
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