Under the FTC Telemarketing Sales Rule (16 CFR Part 310), debt relief companies are strictly prohibited from charging upfront fees before successfully settling a debt.
1. FTC TSR Compliance Mandates
| Mandatory Consumer Protection | FTC TSR Statutory Rule |
|---|---|
| Ban on Upfront Fees | Companies can only charge fees after a written settlement agreement is executed and at least one payment is made. |
| Dedicated Escrow Control | Consumers retain 100% ownership and withdrawal control over their dedicated settlement escrow account. |
| Transparent Fee Structure | Fees must be calculated strictly as a percentage of debt enrolled or percentage of debt saved. |