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Connecticut Makes it Tougher on Unlicensed Companies

I’ve been writing about the debt relief world for a long time now. But today the Connecticut Department of Banking pulled a new one on me. Not only is Connecticut tough as nails when it comes to offering debt relief in their state, but now they are even going after companies that “are violating or are about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner.”

Section 36a-52 of the Connecticut General Statutes provides, in pertinent part, that: (a) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.

So now not only do you have to worry about if you are offering services to Connecticut residents but if you might be in the future. Now that’s a very interesting approach.

In the action that brought this to my attention the State of Connecticut contacted Nationwide Debt Services in New Jersey and Russo & Associates in New York. The State said:

  1. Nationwide Debt Services is a New Jersey limited liability company with an office at 60 Dutch Hill Road, Suite 1, Orangeburg, New York.
  2. Russo & Associates is a New York professional corporation with an office at 101-05 Lefferts Boulevard, Richmond Hill, New York.
  3. On October 27, 2010, two Connecticut residents entered into an “Agreement” (“Agreement”) with Nationwide Debt Services and, indirectly, Russo & Associates, in which the Connecticut residents engaged the services of Respondents in connection with negotiating a possible mitigation of such Connecticut residents’ unsecured debts.
  4. In connection with the Agreement, the Connecticut residents referred to in paragraph 2 above made payments to Respondents totaling $2,847, which amount is in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees established by the Commissioner on or about October 1, 2009 (“Schedule of Maximum Fees”).
  5. The Schedule of Maximum Fees provides, in pertinent part, that, “[a] debt negotiator of unsecured debt may charge the debtor a reasonable one-time initial or set-up fee in an amount not to exceed fifty dollars ($50). . . . A debt negotiator of unsecured debt may collect total aggregate fees including the initial fee and service fees, not to exceed ten percent (10%) of the amount by which the consumer’s debt is reduced as part of each settlement . . .”.
  6. At no time relevant hereto have Respondents been licensed to engage or offer to engage in debt negotiation in this state, nor did Respondents qualify for an exemption from such licensure.
  7. On June 29, 2012, the Commissioner received a complaint filed by the Connecticut residents referred to in paragraph 2 above, concerning Respondents’ failure to perform or successfully complete the services specified in the Agreement.

So the matter continued till it reached this point:

  1. Nationwide Debt Services’ – Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
  2. Russo & Associates’ – Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation. – Source

Forget that whole Don’t Mess With Texas thing. The saying in the debt relief industry should be, Seriously, Don’t Mess With Connecticut.

Debt Settlement Solutions

And while I’m at it, Debt Settlement Solutions also received some bad news on the same day. The State stated:

  1. Respondent is a Florida corporation having its principal place of business at 1645 Palm Beach Lakes Boulevard, Suite 420, West Palm Beach, Florida.
  2. At all times relevant hereto, Jason Simons was the President and Registered Agent of Respondent.
  3. From at least October 1, 2009 to May 2010, Respondent engaged in debt negotiation of unsecured debt on behalf of at least sixteen (16) Connecticut residents.
  4. From December 2009 to May 2010, Respondent was paid fees in the amount of at least $15,525 by the Connecticut residents referred to in paragraph 3 above.
  5. At no time relevant hereto has Respondent been licensed to engage in debt negotiation in this state, nor does Respondent qualify for an exemption from such licensure.

So…

THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-50(c) of the Connecticut General Statutes, that Debt Settlement Solutions, Inc., MAKE RESTITUTION of any sums obtained as a result of Debt Settlement Solutions, Inc., violating Section 36a-671(b) of the Connecticut General Statutes in effect prior to October 1, 2011, plus interest at the legal rate set forth in Section 37-1 of the Connecticut General Statutes. Specifically, the Commissioner ORDERS that: Not later than thirty (30) days from the date this Order to Make Restitution becomes permanent, Debt Settlement Solutions, Inc. shall:

  1. Repay each Connecticut resident and in the amount identified in Exhibit A attached hereto plus interest and any other Connecticut resident who entered into an agreement for debt negotiation services with Debt Settlement Solutions, Inc., on and after October 1, 2009, any fees paid by such Connecticut resident to Debt Settlement Solutions, Inc., plus interest. Payments shall be made by cashier’s check, certified check or money order; and
  2. Provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or [email protected], evidence of such repayments. – Source

Here’s looking “way back” at you kid.

But That’s Not All…

Independence Law Group was also named by the State.

  1. Respondent is a Florida corporation with offices at 9832 West Sample Road, Coral Springs, Florida; 10001 NW 50th Street, Suite 112, Sunrise, Florida; and 4555 NW 103rd Avenue, Suite 100, Sunrise, Florida.
  2. On or about May 10, 2012, a Connecticut resident executed an “Authorization Form” in connection with a “Retainer Agreement & Agreement for Services” (“Agreement”), which Agreement authorized Respondent to represent the Connecticut resident to negotiate, among other things, loan modifications with such resident’s first and secondary mortgage lenders.
  3. In connection with the Agreement, total payment of $2,100 was paid to Respondent by the Connecticut resident referred to in paragraph 2 above, which amount is in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees established by the Commissioner on or about October 1, 2009 (“Schedule of Maximum Fees”).
  4. The Schedule of Maximum Fees provides, in pertinent part, that “[a] debt negotiator of secured debt, including Short Sales and Foreclosure Rescue Services, may impose a fee upon the mortgagor or debtor for performing debt negotiation services not to exceed five hundred dollars ($500). Such fee shall only be collectable upon the successful completion of all services stated in the debt negotiation service contract”.
  5. At no time relevant hereto has Respondent been licensed to engage or offer to engage in debt negotiation in this state, nor did Respondent qualify for an exemption from such licensure.
  6. On September 25, 2012, the Commissioner received a complaint filed by the Connecticut resident referred to in paragraph 2 above, concerning Respondent’s failure to perform or successfully complete the services specified in the Agreement. – Source

But I also need to add on American Trust Counsel. If you can’t trust the American Trust Counsel, who can you trust?

  1. Respondent is a Florida limited liability company with an office at 4555 N.W. 103rd Avenue, Suite 105, Sunrise, Florida.
  2. On September 10, 2012, a Connecticut resident executed a “Third Party Authorization” in connection with a “Retainer Agreement & Agreement for Services” with Respondent (“Agreement”), by which Agreement the Connecticut resident engaged the services of Respondent to negotiate a possible mitigation of such Connecticut resident’s current home loan situation.
  3. In connection with the Agreement, the Connecticut resident referred to in paragraph 2 above made payments to Respondent totaling $2,400, which amount is in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees established by the Commissioner on or about October 1, 2009 (“Schedule of Maximum Fees”).
  4. The Schedule of Maximum Fees provides, in pertinent part, that “[a] debt negotiator of secured debt, including Short Sales and Foreclosure Rescue Services, may impose a fee upon the mortgagor or debtor for performing debt negotiation services not to exceed five hundred dollars ($500). Such fee shall only be collectable upon the successful completion of all services stated in the debt negotiation service contract”.
  5. At no time relevant hereto has Respondent been licensed to engage or offer to engage in debt negotiation in this state, nor did Respondent qualify for an exemption from such licensure.
  6. On November 13, 2012, the Commissioner received a complaint filed by the Connecticut resident referred to in paragraph 2 above, concerning Respondent’s failure to perform or successfully complete the services specified in the Agreement. – Source

Connecticut Makes it Tougher on Unlicensed Companies
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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.

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