The Federal Trade Commission on Thursday announced a telemarketing rule change that, if successful, could put a stop to a fast-growing rip-off that preys on consumers already over their heads in credit card debt.

The commission targeted debt settlement firms that collect advance fees from consumers before attempting to reduce their unsecured debt. By amending its Telemarketing Sales Rule, the FTC barred any of the companies that sell their services over the phone from demanding payment upfront.

The problem with these arrangements, according to consumer-advocacy groups and regulators, is that settlement companies often collect thousands of dollars in fees and, afterward, do little to reduce customers' debt.

"Too many of these companies pick the last dollar out of consumers' pockets — and far from leaving them better off, push them deeper into debt, even bankruptcy," said Chairman Jon Leibowitz in a prepared statement announcing the rule change, which takes effect Oct. 27.

In the last 10 years, the commission and its state counterparts have launched at least 259 enforcement actions against debt relief outfits, accusing them of defrauding down-on-their-luck consumers.

The problem grew worse when the economy tanked, increasing the ranks of those desperate enough to fall for the telemarketers' promise of fast, pain-free relief. Their pitches ranged from the polished and professional — like wise words from a trusted financial adviser — to hucksterish promises of free money.

Online, scores of debt relief websites refer to the nonexistent "Obama Debt Relief Act." According to consumer groups, settlement companies often convinced their marks that — after paying advance fees — the firms could use bank-bailout and economic-stimulus funds to pay consumers' debt.

Plenty of people fell for it.

On Tuesday, Consumer Federation of America and other groups released a list of last year's most common consumer complaints to state and local regulators. Reports of debt relief scams came in second place, just behind auto-related complaints involving car dealers and mechanics.

In addition to banning advance fees on debt settlement services sold over the phone, the FTC rule change will require debt settlement telemarketers to make specific disclosures to consumers about how the process works, how long it will take, how much it costs and whether a settlement might negatively affect the consumer's credit worthiness.

Nonprofit firms are not covered by the rule change.

A trade group for debt settlement companies has called the new rule anti-consumer and a victory for big banks and creditors. That view is not shared by many established consumer-advocacy groups — including the Center for Responsible Lending; Consumer Action and Consumers Union, the publisher of Consumer Reports magazine — all of which endorsed the rule change.

Susan Grant, head of consumer protection at Consumer Federation, said the new rules might clean up an industry best known for "taking consumers' money regardless of whether they ever get the promised results." But Grant's group and other consumer-advocacy organizations believe it's only a first step.

That's because the change won't affect debt settlement companies that enroll customers online or in-person. And the new FTC rules don't say how much settlement companies can charge consumers, or whether that sum must relate to the amount that their debts are reduced.

That's the purpose of legislation introduced this year by U.S. Sens. Claire McCaskill, D-Mo., and Charles Schumer, D-N.Y. Dubbed the Debt Settlement Consumer Protection Act, the bill would cap fees and charge regulators with cracking down on predatory players in the industry.

The bill also would give consumers a way out if they think a debt settlement company they've hired isn't doing its job. They would be able to cancel the contract and receive a full refund of unearned fees.

Consumers having a tough time paying their bills don't need to wait for more reforms. Instead, they can contact an accredited credit counseling service for advice. To find one, call the National Foundation for Credit Counseling at 1-800-388-2227; or Association of Independent Consumer Credit Counseling Agencies at 1-866-703-8787.

For more help picking a credit counseling service, read the FTC publication "Fiscal Fitness: Choosing a Credit Counselor." It's available on the commission's website — ftc.gov — or by calling 1-877-FTC-HELP.