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Consumer and Business Debt Counseling Services – CBDC Sued by Colorado AG

Consumer and Business Debt Counseling Services (CBDC), a 501(c)3 nonprofit credit counseling company I’ve written about before, here, has just been sued by the Colorado Attorney General.

The scoop on CBDC was they has close working relationships and referrals from for profit companies that were charging high advance fees.

The official release says:

Colorado Attorney General John Suthers announced today that his office has filed a complaint against Consumer and Business Debt Counseling Services, an Orlando, Fla.-based company, suspected of engaging in unregistered debt management services for Colorado consumers.

Consumer and Business Debt Counseling Services is suspected of providing “back end” debt management services for the Johnson Law Group, another Orlando, Fla.-based company the Office of the Attorney General filed a consumer protection lawsuit against in April 2011. The company failed to register with the state, as required by the Colorado Debt-Management Services Act, while it allegedly enrolled Colorado consumers between January 1, 2008 and August 12, 2009. Consumer and Business Debt Counseling Services also is suspected of failing to comply with Colorado after the Attorney General’s Office apprised it of its misconduct in March 2011.

The Office of the Attorney General secured a $594,000 judgment against a similar Florida-based company in mid-August. That company, Enhanced Servicing Solutions, also provided “back end” debt management services for the Johnson Law Group.

The new bit of news I did not realize before is that CDBC is a Massachusetts corporation. The suit also names Isaac Bobbe as its president.

The Suit States

Defendant CBDC provides back-end support services to credit-counseling companies. Specifically, CBDC negotiates with creditors on behalf of its clients’ (the credit counseling companies) customers to have the creditors reduce finance charges or fees for late
payments.

Thus, CBDC is a Provider of debt-management services under the DMSA. See C.R.S. § 12-14.5-202(10).

On December 17, 2010, the State contacted CBDC requesting information concerning CBDC’s business practices in Colorado.

In response to the State’s request for information, CBDC indicated that it has provided “back end services” to Colorado residents on behalf of the Johnson Law Group, PLLC (“JLG FL”) and Johnson Law Group, APC (“JLG NV”).

According to CBDC’s records, CBDC negotiated with creditors on behalf of 292 of JLG FL’s Colorado customers enrolled between January 1, 2008 and August 12, 2009, and on behalf of 29 of JLG NV’s Colorado customers enrolled between January 1, 2008 and July 1, 2008.

CBDC, however, has failed and refused to obtain a certificate of registration from the Administrator.

Moreover, the contracts under which CBDC has provided debt-management services on behalf of JLG FL and JLG NV do not comply with the DMSA.

In particular, the JLG NV contracts under which CBDC performs services fail to comply with the following subsections of C.R.S. § 12-14.5-219:

a. (a)(2)-(4), providing that agreements must be signed and dated by the Provider, must include the client’s address, and must disclose the Provider’s name, business address, and telephone number;

b. (a)(6), requiring that certain disclosures be made;

c. (d)(1), (2), and (3), requiring that agreements contain certain disclosures;

d. (e), mandating that the powers of attorney contain certain restrictions; and

e. (f)(1), providing that agreements may not provide for application of the law of any jurisdiction other than the United States and this state.

Further, the JLG NV consumers on whose behalf CBDC performs debt management services have not been provided with the “Notice of Right to Cancel” disclosures, in violation of C.R.S. § 12-14.5-220, or the “Important Information for You to Consider” disclosures, in violation of C.R.S. § 12-14.5-217(d), (e), and (g)

Still further, the JLG NV contracts under which CBDC provided debtmanagement services provide for a set-up fee as high as $2,573.95 and monthly fees of $59.00 per month, in violation of C.R.S. § 12-14.5-223(d)(1)(A) and (B).

Similarly, the JLG FL contracts under which CBDC performs services fail to comply with the following subsections of C.R.S. § 12-14.5-219:

a. (a)(3), providing that agreements must include the client’s address;

b. (a)(6), requiring that certain disclosures be made;

c. (d)(1), (2), and (3), requiring that agreements contain certain disclosures;

d. (f)(1), providing that agreements may not provide for application of the law of any jurisdiction other than the United States and this state.

Further, the JLG FL consumers on whose behalf CBDC performs debtmanagement services have not been provided with the “Notice of Right to Cancel” disclosures, in violation of C.R.S. § 12-14.5-220, or the “Important Information for You to Consider” disclosures, in violation of C.R.S. § 12-14.5-217(d).

Still further, the JLG FL consumers on whose behalf CBDC performs debtmanagement services have not been provided with the information concerning the creditors
CBDC expects to participate and grant concessions and those it does not, in violation of C.R.S.
§ 12-14.5-217(c)(3).

In addition, the JLG FL contracts under which CBDC provides debt-management services provide for a set-up fee as high as $2,377 and monthly fees of $59 per month, in violation of C.R.S. § 12-14.5-223(d)(1)(A) and (B).

Finally, the JLG FL contracts under which CBDC performs services provide for an NSF fee as high as $30, in violation of C.R.S. § 12-14.5-223(f).

As a result of these violations, the State delivered to CBDC a proposed Stipulation and Final Agency Order (the “Stipulation”) on March 4, 2011 setting forth a resolution acceptable to the Administrator.

CBDC failed to agree to the proposed Stipulation. – Source

Consumer and Business Debt Counseling Services   CBDC Sued by Colorado AG
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About Steve Rhode

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.
  • Formeremployee

    Issac Bobbe?  CBDC is Tom Roland’s company and everyone knows it.  How odd that they have the same address as the shut down Johnson Law Group and Enhanced Servicing Solutions in Orlando.

    SCAMMERS.  PRISON TIME.  HOW CAN NO ONE SEE THIS?

    • Musicman

       Interesting? I worked with Tim’s wife for many years (she was/is a singer of sorts)
      and as they started to really make money a change came over them. I was owed money for studio time and was getting paid by Tim from his business accounts. He was calling his wife’s “project” recording for his businesses phone messaging system. I told him that was”Fraud and Embezzlement” and that I couldn’t bill that way as I would be an accomplice. Needless to say I ended my business and personal relationship with the McCallans back in 2005 and find this all very interesting!!! Some might call it Karma! I have a really BAD feeling about all of this as I did back In 2005. Guess I made the right move!

      • shortpattiboy

        People like yourself are quick to judge when you have no use for others.
        I have always known the McCallans to be good people who have helped
        many others. They gave me a second chance in business and it allowed me
        to grow and help many others in my life. Musicman sounds like to me like you are a bitter ex music guy that is SHORT on patience. Sounds to me like you need to focus more on your own business and less on others. I guess your screen name musicman isnt the best name for a washed up want to be.

  • When will it end?

    Oh let me go throw up! Isaac Bobbe! Tim McCallan strikes again! Steve please re-release your story from I think earlier this year about Tim “9 lives” and change it to 99 lives. How can’t the fed’s piece this whole thing together and just take them down? Everyone of these companies leads back to McCallan it doesnt take a genius to figure it out. How many times can you be sued?  I’m mean really? And the Feds? these guys went to college?

    I’m glad I didnt eat lunch yet.

    • http://GetOutOfDebt.org Steve Rhode
      • When will it end?

        Yeah that is the one..I mean really? how long does it have to go on for? All the pieces are right there how can the FTC and other agencies not find a way to put this guy in jail?

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