The recent slump in the economy has financially disturbed almost all the individual and the whole business sector.
Businessmen are facing loss and are about to shut down their businesses which has increased the ratio of unemployment.
These financial crises compel them to use credit cards in order to meet their expenses but at the time of payment, they are unable to pay the installments.
Credit card companies want their money without any delay and if anyone fails to pay it then they pressurize him for the payment.
Many people have contacted debt settlement companies to save themselves from the pressure of financial institutions but unfortunately, some people hired fraudulent companies and their problems increased rather than decreasing.
It is the prime responsibility of any government to protect the consumer rights.
These fraudulent companies are working just to cheat the innocent people and earn money.
When a person consults them, they study his case and demand advance fee.
After getting the fees, they do not contact the lender and tell the consumer that he cannot get reduction in the liabilities because the lender is not agreeing Therefore you have to pay the full amount of debts.
Due to this reason, people are reluctant to contact debt settlement companies and prefer filing bankruptcy.
In order to protect consumers from this fraud, the federal government established new law which is helpful to save cardholders from the fraud of fake company.
According to the new law of debt negotiation, companies have no right to demand advance fees.
They can only ask for the fees when they manage to get reduction in the consumer's liability by negotiating with the financial institutions.
The new law also defines the fee limit which would be paid by the consumer.
Now after the implementation of the new laws, you are not supposed to pay the fees in advance.
Moreover, you will be aware of the fee limit which will make the negotiation process more transparent.
Thus one can hire the settlement firm without any fear of fraud and can get relief from massive unsecured debts.