New legislation targeting debt counseling and settlement services seeks to protect consumers from fraud. Industry and consumer groups have split opinions on the laws 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 woodsundoubtedly useful expertise, but something you hope youll 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 theres no national oversight of credit counselors, debt consolidation programs, and debt settlement companies. The National Conference of Commissioners on Uniform State Laws (NCCUSL) be employment law advice for employers lieves 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: Debt counselors must register in their state as a consumer debt-management service. This process requires the counselor to provide the state with thorough background information on the companys financial condition, management, and ownership.Debt counselors must be insured against fraud and give the state a $50,000 security bond.Debt counselors must disclose certain information to consumers before entering into an agreement. Consumers must be aware of fees, services offered, and risks and benefits of working with a debt counselor.Contract verbiage and fees charged are regulated by the UDMSA.Consumers have the right to cancel the contract within three days.