As the American economy is starting to pull out of the deep recession that greeted us when we got to the White House, there are still far too many working people struggling to pay their bills and support their families. And the last thing we need at a time like this is deceptive, abusive business practices designed to take advantage of struggling middle-class Americans.
That’s why Vice President Biden held a Middle Class Task Force meeting on Thursday to talk about stronger consumer protection to protect American households from deceptive practices. The VP was joined by Jon Leibowitz, Chairman of the Federal Trade Commission, who came to our Task Force meeting to announce new rules that will protect consumers of debt relief services.
These debt relief companies promise to get consumers out of debt, but too often it turns out that they collect excessive fees even as they fail to deliver on their too-good-to-be-true promises, leaving struggling Americans in even worse shape than before. Among other protections, the new rules Chairman Leibowitz announced last week will ban advance fees, ensuring that debt relief companies actually deliver on their promises by reducing a consumer’s debt before they can collect payment.
This new FTC rule is a perfect example of the kind of simple, common-sense changes we need to protect American consumers and strengthen the middle class. That’s why the Middle Class Task Force enthusiastically supports the work that’s being done by the FTC and other independent agencies to strengthen consumer protection during these tough economic times.
Jared Bernstein is Chief Economic Advisor to the Vice President