After the introduction of federal debt relief rules, a dramatic change has occurred in the bad debt industry.
These rules have made the consumer's financial situation safer and it has made the debt negotiation procedure a reliable debt elimination method.
Though debt settlement has been recognized as the best debt elimination system, it did have some negative practices on consumer.
One such practice is the collection of non-refundable advance fee.
Many fake companies did not have guarantee of the debt being settled.
Therefore they started a practice collecting these upfront fees so that they can survive in the industry even without a single deal is done.
Due to this practice, consumer's faith on the industry was destroyed.
But in 2010 a successful attempt was done by the Federal Trade Commission to make debt settlement a legitimate option.
Through this newly introduced legal framework, relief companies are prohibited from collecting advance service charges from the poor consumers.
But of cause the companies are allowed to charge their service fee for the actual service they provided to the consumer.
The federal debt relief method has reduced the consumer's risk of entering a settlement company.
And it has indirectly affected on the fraudulent settlement companies functioning in the filed.
These fake companies could gain profits through the collection of advance fee, even without doing any actual settlement.
But now they have lost that opportunity.
Therefore many fake companies are tending to be slipping out of the industry.
Because of that the consumers will get the chance of obtaining the professional service of a quality and genuine relief company.
After all we can say that finally federal rules have made debt settlement a legitimate option.