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Mon March 8, 2010
Granholm to propose debt settlement regulations
By Rick Pluta, Michigan Public Radio Network
LANSING, MI – Governor Granholm says she will ask the Legislature to regulate a growing industry in Michigan that targets consumers who have fallen behind on their bills.
The governor says the state is getting a growing number of complaints about debt settlement companies. The companies typically charge big upfront fees and promise to help their customers quickly get out of debt by paying off their bills at a reduced rate. But the governor says those promises are often not kept, and consumers wind up with worse credit without shaking off debt collectors.
"As consumer credit card debt grows and overall debt skyrockets, the number of unregulated and financially dangerous debt settlement companies is increasing dramatically," Granholm says.
The governor says she wants debt settlement companies to be licensed. She says, until then, consumers looking for help should turn to state-licensed debt managers.