New rules for debt companies Ever been ripped off by a debt settlement company?

Good news: The Federal Trade Commission has issued new rules that will crack down on that industry's worst practices soon.

The agency intends to stop companies from falsely inflating how much they will slash people's debt while collecting huge upfront fees -- and from leaving people financially worse off than before.

The bad news is the rules won't curb high fees and they apply only to for-profit companies that sell debt relief services over the telephone.

Here are the actions that the FTC announced in late July. For-profit debt-relief companies:

•Must fully disclose, starting Sept. 27, upfront how their program works and when you can expect to see results. You'll know how much the service will cost and what negative consequences could result, such as a lower credit score.

•Can require that you open a dedicated bank account that you own and control. This provision assures that the companies will get paid while protecting the consumers' money, FTC senior attorney Alison Brown said. The money must be kept in an insured financial institution unaffiliated with the debt-relief company and there can be no withdrawal penalties.

•Can't make misrepresentations anymore. They can't say they're a nonprofit if they're not, or exaggerate claims about their success.

•Can't charge, starting Oct. 27, any money until they settle, reduce or change the terms of at least one of your debts. There must be a signed agreement between you and your creditor, and you must have made at least one payment under the agreement. Also, the company can't collect an entire fee after settling one of multiple debts.

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Consumers, if you're in debt over your head, follow these tips:

•Face the financial facts. "Write down who you owe, how much, the minimum payment and monthly due date," said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. "Seeing your financial situation staring back at you in black and white can be a very powerful incentive to take control."

•Find a reputable debt counselor. "You want to find a nonprofit counseling service that doesn't charge upfront fees," said Lauren Bowne, a staff attorney at Consumers Union. Find one at www.nfcc.org.

•Learn to spot shysters. They may try to lure you with a government program that doesn't exist, Brown said. Or offer you guarantees that they probably can't make good on.

•Develop a budget and stick to it. Live within your means, said Mike Burnette, spokesman for Housing Opportunities Made Equal of Virginia Inc.

•Take on a part-time job. Dedicate all of that income to paying down debt, Cunningham urged.

•Don't ignore correspondence from a court. Respond and clear it up, even if it's a mistake, or you may find yourself on the losing end of a default settlement, Bowne said.