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Governor Jodi Rell says she wants to see tough new legislation to crack down on predatory debt negotiators.  

As problems with debt and foreclosure continue to rise, so too does the proliferation of debt adjusters or negotiators, who promise to help homeowners, often for a stiff up-front fee.  Attorney General Richard Blumenthal says there must be urgent action.

"We’re seeing an epidemic of credit repair offers and debt advice schemes, particularly focusing on people in foreclosure that are misleading and deceptive – over-promising and charging unjustified fees."

It’s these kinds of practices that the proposed bill would target, forcing such negotiation services to obtain state regulated licenses.  The legislation would also change the definition of a debt adjuster, and would bolster the enforcement powers of the state’s banking commissioner.  Homeowners who need advice on managing debt can get services from many legitimate non-profit agencies, or from programs administered by the Connecticut Housing Finance Authority.