This is just out from the New York City Department of Consumer Affairs. And for the record, this is the same thing that is going to happen to companies that get involved in debt restructuring as well.
Department of Consumer Affairs (DCA) Commissioner Jonathan Mintz announced today that DCA is issuing subpoenas to 15 debt settlement companies, all of which were the subjects of complaints by New Yorkers and/or are based in the New York City area. The subpoenas are targeted to reveal the extent to which these companies have fraudulently lured New York City consumers with illegal advertising claims and charged them additional upfront fees, and to examine to what extent anyone has actually been helped, rather than harmed, by their “settlement” services. DCA identified these companies after examining consumer complaints filed with DCA and other consumer protection partners, as well as by companies’ local and online advertisements that make such promises as to “cut your debt in half.” This investigation is the next step in DCA’s ongoing efforts to protect consumers from the predatory practices of debt collectors, process servers and other key industries, and follows Commissioner Mintz’s announcement in March that the debt settlement industry represented the single greatest consumer fraud of the year.
“These so-called ‘debt settlement’ companies bombard New Yorkers with ads that fraudulently offer false hope, but instead deliver nothing but added fees and long-lasting financial ruin,” said Commissioner Jonathan Mintz. “Today we are issuing subpoenas to 15 debt settlement companies that are using such aggressive and deceptive tactics to prey on vulnerable consumers here in New York so that we can reveal the full extent of their wrongdoing and harm. I urge those struggling with debt to resist these too-good-to-be-true offers and instead take advantage of the City’s free, professional one-on-one financial counseling at one of more than 20 Financial Empowerment Centers.”
The 15 debt settlement companies subpoenaed by DCA are:
- America Debt Free
- CF Capital Financial Group
- Cooperative Credit Union Management
- Credit 911
- Debt Remedy Advice
- Debt Rx USA, LLC
- Diamond Financial Group
- Global Debt Management
- Life Coach, Inc.
- New Path Financial
- Right Start Financial
- Square One Debt Settlement
- United Debt Resolution Group
- The Resolution Group
The majority of the companies have been the subject of consumer complaints filed with DCA or the Better Business Bureau and advertise in local newspapers or on television, radio or online. Five of the companies are based in New York City or have New York City locations and one is located in Nassau County.
NYC Launches Investigation Into Debt Settlement Companies by Steve Rhode
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