FTC Says Debt Settlement Companies Are Actually Harmful to Consumers With Credit Card Debt

Consumers with overwhelming credit card debt are constantly bombarded by debt settlement companies pitching their services on every media available in the United States and finally the Federal Trade Commission Chairman Jon Leibowitz stands up and says these companies use "a business model based on deceit" according to J. Scott Applewhite/Associated Press.

This seems like a big deal because the last time the FTC produced a useful law that actually protected consumers from card debt was back in 1966 when the card industry barely existed! To top it all off, consumer groups believed they were lobbying for this big law that would change the course of history in the debt settlement industry but guess what boys and girls, nothing will happen!

What the population fails to understand is while consumer groups were lobbying Congress the real lobbying was taking place with the usual "cloak and dagger" methods that big banking has used for years. So while these little consumer groups think they have victory, it's actually business as usual for big banking and you probably don't even believe it do you?

See for yourself how this battle has raged from before our Constitution was written up to present day by using the search term "the gig is up--money, the Federal Reserve and you" to watch this video presented at The University of Colorado School of Law and a you'll finally begin to see the overall picture. These settlement companies were siphoning money from the bankers bucket before it could be emptied into his barrel of money.

If you have watched the "gig" then you know the bankers want all the money and these small dog settlement companies were biting at the bankers' cash flow pant legs which is an unforgivable no-no according to his way of thinking.

The settlement companies receive all this free publicity and will end up using it to pull even more people into the settlement trap and allow them to still bite a profit from the bankers' britches. Letting the consumer groups think they've scored a victory may backfire on the banker but what are you to do with that stack of plastic you're staring at?

You go back in time to 1966 when the FTC inadvertently wrote the law on fairness in collecting a debt. There were no card companies lobbying to have the law written to their specifications so this law slipped through the cracks and is now the biggest loophole in all debt law. It is so big a consumer can drive his 18 wheeler loaded with plastic through it and dump it in a collection agency parking lot and walk away.

Banks are required by law to write off your account after six months of nonpayment at which time they sell your account information to a collection agency that will try to extort money from you over the phone and through written collection notices. Use the search term "FTC debt video" to see the law presented as a cartoon show which makes it less believable but it is in fact federal law.

The old FTC law is still your best bet to handle your own debt settlement by beating collectors at their own game both over the phone and through their written collection notices. Consider yourself fortunate that you have new information to protect yourself from vampires at settlement companies and you can even alert your friends that even though consumer groups are shouting victory, big banking actually won this battle. Live life and have fun!

Please visit http://www.creditcarddebtprotection.com or http://www.philscircle.com to discover how to legally negotiate debts down to 10%, increase your credit score 60 to 120 points, learn money mastery for life to stay out of the debt trap forever and never answer a collection call or written notice.