Last reviewed: 2 October 2026

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How to verify a debt settlement company yourself before you enroll

Four checks you can run yourself with public tools: what the FTC's Telemarketing Sales Rule says about when a debt relief fee may be requested and how it may be calculated,^[1] what the CFPB's public complaint database does and does not tell you,^[2] whether the FTC's case library lists an action,^[3] and who the company really is and whether your state licenses it (covered in our guide, not re-derived here). Passing every check is not a recommendation: this page is general information, not legal or financial advice, and it names no company.

Check 1: when a fee may be requested (Standard points 1 and 5)

Under 16 CFR § 310.4(a)(5)(i), it is an abusive telemarketing practice for a seller or telemarketer to request or receive payment of any fee for a debt relief service until and unless all three of these have happened:^[1]

1. the provider has renegotiated, settled, reduced, or otherwise altered the terms of at least one debt, under a settlement agreement, debt management plan, or other valid contractual agreement you executed;^[1]
2. you have made at least one payment under that agreement between you and the creditor or debt collector;^[1] and
3. where debts are settled one at a time, the fee for each debt either bears the same proportional relationship to the total fee as that debt's amount bears to the total enrolled debt, or is a percentage of the amount saved, with the same percentage for every debt. The amounts are measured when the debt was enrolled, and "amount saved" is the amount owed at enrollment minus the amount actually paid to satisfy the debt.^[1]

What to do: read the contract's fee section and the payment schedule. Write down each fee, the event that triggers it, and its amount or formula. Compare each with the three conditions above. Our worksheet calculator does the arithmetic of the two per-debt formulas for numbers you enter. Our Standard also asks for a published, flat fee schedule (point 5) and no advance fees before results (point 1); see how we check.

Scope note: the rule is a telemarketing rule, written about "sellers" and "telemarketers."^[1][4] Its definition of a "debt relief service" (16 CFR § 310.2) is a program or service represented to renegotiate, settle, or in any way alter the terms of payment or other terms of a debt between a person and one or more unsecured creditors or debt collectors, and "telemarketing" means a plan, program, or campaign to induce a purchase by use of one or more telephones that involves more than one interstate telephone call.^[5] So Checks 1 and 2 are written for unsecured debts and for programs sold by telemarketing; whether the rule covers a particular provider and service depends on those definitions and the facts, which this page does not work through. The FTC lists plain-language guidance on debt relief services and the rule on its rule page.^[4] See also the advance-fee rule, explained.

Check 2: where your money sits during the program

The same rule says providers are not barred from asking you to place funds in an account used for the provider's fees and for payments to creditors, provided that all five of these conditions hold:^[1]

• the funds are held at an insured financial institution;
• you own the funds and are paid any accrued interest;
• the entity administering the account is not owned, controlled by, or affiliated with the debt relief service;
• that entity does not give or accept money or other compensation for referring business involving the debt relief service; and
• you can withdraw from the service at any time without penalty and must receive all funds in the account, other than fees earned in compliance with the timing rules above, within seven business days of your request.^[1]

What to do: in the contract and account agreement, find the name of the account administrator and the bank, and check each of the five points against the documents. If something is unclear, ask for the answer in writing. Related: quitting a debt settlement program and getting your funds back.

Check 3: the public record on the company (Standard points 3 and 4)

CFPB Consumer Complaint Database

The CFPB publishes complaint records about financial products and services and lets anyone filter, view and download them. These are structured records, not consumers' written narratives, which the CFPB announced on 14 August 2026 it is ceasing to publish.^[2][6] Four limits the CFPB itself states, which matter for how you read a result:^[2]

• Only complaints sent to companies for response are eligible, and they are published after the company responds, confirming a commercial relationship with the consumer, or after 15 days, whichever comes first.
• The database is not a statistical sample of consumers' experiences, and complaints are not necessarily representative.
• A lack of complaints, or a low number, does not necessarily mean there is little or no consumer harm.
• Complaint volume should be read against company size and market share: companies with more customers may have more complaints.

A complaint is a consumer's account sent to the company, not a finding by any court or agency. See our guide to reading the database.

FTC cases and proceedings

The FTC's Legal Library has information on cases the agency has brought in federal court or through its administrative process, and the page says the FTC brings hundreds of cases every year.^[3] Its search can be filtered by record type, including "Banned Debt and Mortgage Relief Providers" and "Banned Debt Collectors," and by consumer-protection topics under Credit and Finance such as "Debt" and "Debt Collection."^[3] Search for the company's legal name and any other names it uses. Our reading, not the FTC's: a search that finds nothing is not proof that no agency or court has ever acted, since this library covers FTC matters only; state attorneys general are a separate source, and our Standard point 4 looks at both.

Check 4: who they are, and state licensing (Standard points 6 and 8)

• Identity (point 8): our Standard looks for a named company, a real address, a working contact method, and ownership and any predecessor-company history. Compare the legal name and address on the contract with the name on the payment authorization and with any state record you find. A mismatch is a question to ask, not a conclusion.
• State licensing (point 6): debt settlement is licensed or regulated state by state, and the rules differ. We do not restate them here; see state licensing of debt settlement companies, then check the company on your own state regulator's lookup tool.
• Attorney-run programs: some states treat an attorney's own legal work differently; see the attorney model, explained.

How to verify this yourself: the tools

1. Rule text: 16 CFR § 310.4 (Cornell LII) and the FTC's Telemarketing Sales Rule page^[1][4].
2. Complaints: the CFPB Consumer Complaint Database^[2].
3. Enforcement: the FTC Legal Library, Cases and Proceedings^[3].
4. State license and state enforcement: your state regulator and attorney general (see the guide linked above).

If you think a company has broken a rule, see where to file a credit, debt, or scam complaint.

What this page does not cover

It does not tell you whether debt settlement is right for you, what a program will cost in total, what happens to your credit or taxes, or whether any particular company is lawful or honest. It is not legal or financial advice. For the program itself, see what to expect from debt settlement, and for the tax side, canceled debt and taxes. The Register reports dated checks we have run on specific companies against our Standard; it does not replace running these checks yourself, and it is not a recommendation.

When we will update this page

We revisit it if 16 CFR § 310.4 is amended, or if the CFPB database or the FTC Legal Library changes how they work. Sources last read 2 October 2026.