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The Uniform Debt-management Services Act

New legislation targeting debt counseling and settlement services seeks to protect consumers from fraud. Industry and consumer groups have split opinions on the law’s usefulness.

Understanding the ins and outs of the Uniform Debt-Management Services Act (UDMSA) is like learning how to survive on twigs and berries when lost in the woods—undoubtedly useful expertise, but something you hope you’ll never need.

The UDMSA is legislation that covers debt settlement and credit counseling services, which helps people who may be in need of debt consolidation programs. Currently, these services are regulated at the state level, which means debt-ridden consumers in California who seek help are probably treated differently than their counterparts in Maine. It also means that there’s no national oversight of credit counselors, debt consolidation programs, and debt settlement companies. The National Conference of Commissioners on Uniform State Laws (NCCUSL) believes consumers stand to benefit from a more consistent approach to the regulation of these services. For this reason, the NCCUSL is asking state governments to adopt the UDMSA. Understanding UDMSA

The UDMSA has three main sections: registration, agreements, and enforcement. Provisions include:

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