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Eleven Companies Settle With The State Under New Debt-Management And Credit Counseling Regulations

Colorado Attorney General John Suthers announced 3-12-2009 that enforcement actions taken under debt management laws that came into effect last year have resulted in settlements from 11 companies.

“In this current economy, consumers need to be particularly careful about offers to eliminate debts and erase negative information from credit records,” Attorney General John Suthers said. “Consumers should avoid paying large amounts in money in return for promises that sound too good to be true.”

The debt laws apply to debt management companies that contract with Colorado consumers on or after Jan. 1, 2008. In addition, as of July 1, 2008, these companies must register with the Attorney General’s Office. Forty companies are now registered, consisting of seven that offer debt settlement services and 33 that offer credit counseling. Debt management companies generally work with unsecured debt such as credit cards and medical bills.

Since the new laws took effect, the Attorney General’s Office received 27 consumer complaints about debt management companies. In addition, it reached settlements with 11 companies that violated the law. The most common violations were failing to be registered, charging illegal fees and failing to allow consumers to cancel contracts. As a result of these investigations and settlements, debt management companies have refunded $923,370 in program fees to 912 Colorado consumers — an average of over $1,000 per consumer. In addition, some settlements required the companies to pay investigative costs and penalties. The Attorney General’s Office continues to investigate unregistered companies.

The 11 companies that settled investigations with the Attorney General’s Office are listed below. All monetary amounts have been paid or will be in paid during the next several months.

Century Negotiations, Inc., a Pennsylvania debt settlement company, refunded $53,796 to 51 Colorado consumers and paid $25,500 in investigation costs and penalties. It was not registered when it contracted with Colorado consumers. It is registered as of Dec. 3, 2008.

Clearone Advantage, LLC dba Clearone Debt Relief, a Maryland debt settlement company, refunded $5,535 to two Colorado consumers and paid $1,000 in investigation costs and penalties. It failed to comply with the law’s provisions on cancellation rights, cautionary disclosures and advertising. It also was not registered when it contracted with Colorado consumers. It is not registered.

Credit Answers, LLC, a Texas debt settlement company, refunded $82,809 to 27 Colorado consumers and paid $5,000 in investigation costs and penalties. It failed to comply with the law’s provisions on program fees, cancellation rights and cautionary disclosures. Its application for registration is pending.

Debt Relief of America, a Texas debt settlement company, refunded $20,201 to 22 Colorado consumers and paid $5,000 in investigation costs and penalties. It failed to comply with the law’s provisions on program fees, cancellation rights and cautionary disclosures. It also was not registered when it contracted with Colorado consumers. It is not registered.

Financial Freedom Resources, Inc., a Florida debt settlement company, refunded $7,858 to 10 Colorado consumers. It failed to comply with the law’s provisions on program fees, cancellation rights and cautionary disclosures. It also was not registered when it contracted with Colorado consumers. The company is no longer in business and is not registered.

Freedom Debt Relief, LLC, dba Freedom Debt, Freedom Debt Help, Freedom Debt Reduction, Freedom Debt Relief USA, Freedom Financial Network and Debt Resolution Partners, a California debt settlement company, refunded $509,582 to 558 Colorado consumers and paid $109,500 in investigation costs and penalties. It failed to comply with the law’s provisions on cancellation rights, cautionary disclosures and advertising, and was not registered when it contracted with Colorado consumers. It is registered as of Feb. 3, 2009.

National Foundation for Debt Management, Inc., a Florida credit counseling company, refunded $16,572 to 90 Colorado consumers and paid $10,500 in investigation costs and penalties. It failed to comply with the law’s provisions on cautionary disclosures and was not registered when it contracted with Colorado consumers. It was registered on Jan. 15, 2009.

New Beginnings Debt Settlement, LLC a Florida debt settlement company, refunded $110,000 to 86 Colorado consumers and paid $49,500 in investigation costs and penalties. It failed to comply with the law’s provisions on program fees, cancellation rights, cautionary disclosures and advertising, and was not registered when it contracted with Colorado consumers. It is not registered.

New Life Debt Relief Corp., a California debt settlement company, refunded $36,000 to 14 Colorado consumers and paid $5,000 in investigation costs and penalties. It failed to comply with the law’s provisions on program fees, cancellation rights and cautionary disclosures. It also was not registered when it contracted with Colorado consumers. It is registered as of Feb. 24, 2009.

PDL Assistance, Inc. dba PDL Eliminators, an Alabama debt settlement company, refunded $5,825 to 12 Colorado consumers and paid $17,000 in investigation costs and penalties. It failed to comply with the law’s provisions on program fees, cancellation rights, cautionary disclosures and advertising. It is not registered.

Pemper Companies, Inc. dba Curadebt, Curadebt Systems and Banks, Schwarz & Levitz, a California debt settlement company, refunded $4,075 to four Colorado consumers and paid $5,000 in investigation costs and penalties. It failed to comply with the law’s provisions on program fees, cancellation rights, cautionary disclosures and advertising. It also was not registered when it contracted with Colorado consumers. It is not registered.

Eleven Companies Settle With The State Under New Debt Management And Credit Counseling Regulations
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Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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