Federal Debt Solutions and a Bunch of Others Banned by the FTC

Steve Rhode — Thu, 22 Apr 2010 16:06:15 +0000

At the Federal Trade Commission’s request, a federal court has banned eight companies and their principals from selling credit repair and mortgage relief services, and ordered them to pay more than $7.5 million for deceiving consumers throughout the United States.

In February 2009, the FTC charged seven of the companies and three officers with making false promises that they would improve consumers’ credit scores by removing negative information such as late payments, charge-offs, collections, inquiries, delinquencies, judgments, and accounts discharged in bankruptcy. According to the FTC’s complaint, the defendants charged consumers up to $2,000, including illegally charging an advance payment of $300, and failed to provide written contracts and other materials required by law. In August 2009, the FTC added defendants to the case, alleging that they and one of the original defendants falsely claimed they would help consumers get mortgage loan modifications or stop foreclosure in all or virtually all instances. The court entered default judgments against all of the defendants except Gerald Serino, also known as Jerry Serino, after they failed to respond to the lawsuit.

The credit repair defendants are United Credit Adjusters, Inc., doing business as United Credit Adjustors and UCA; United Credit Adjustors, Inc., d/b/a United Credit Adjusters and UCA; United Counseling Association, Inc., d/b/a UCA; Bankruptcy Masters Corp., National Bankruptcy Services Corp., Federal Debt Solutions, Ltd., United Money Tree, Inc., Ahron E. Henoch, Ezra Rishty, and Gerald Serino. The loan modification defendants are The Loan Modification Shop, Ltd., Casey Lynn Cohen, a/k/a Casey Lynn Collins, and Rishty.

The court order prohibits the credit repair companies and their owners from selling credit repair services, and it bans the loan modification companies and their individual owners from selling mortgage loan modification and foreclosure relief services. The order also prohibits the defendants from misleading consumers about financial goods and services, such as loan terms or rates, how much a consumer will save by enrolling in a debt relief service, and credit terms other than those a lender actually offers. The order also bars the defendants from misleading consumers about any good or service, such as refund terms, government affiliation, and total cost.

In addition, the order bars the defendants from trying to collect payment from their customers, and from selling or otherwise disclosing their customers’ personal or financial information. The order imposes a $7,500,334 judgment against the credit repair defendants, and a $32,710 judgment against the loan modification defendants. Litigation will continue against Serino.

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Credit Repair and Credit Counseling Firms Banned From New Jersey

Steve Rhode — Fri, 31 Jul 2009 10:21:31 +0000

From How to Get Out of Debt

A Final Consent Judgment has been entered against the defendants sued by the Office of the Attorney General in New Jersey and its Division of Consumer Affairs for allegedly offering credit repair and credit counseling services that consumers paid for but did not receive.

Defendants United Credit Adjusters, Bankruptcy Masters Corp., United Counseling Association, Inc., and Credit Bureau Controls Corp. were ordered to pay $500,000 in civil penalties and $86,918 in reimbursement to the state, under the Final Consent Judgment issued on July 28 by Superior Court Judge Thomas W. Cavanagh, Jr.

Defendants Ezra Rishty and Ahron E. Henoch, both of whom were officers of the defendant companies, are personally responsible for paying $15,022 in restitution to 17 consumers. Both men, along with their firms, are permanently banned from doing credit counseling, credit repair, debt adjuster and bankruptcy work in New Jersey, under the Final Consent Judgment.

“This settlement sends a clear message to those who think they can profit from the misfortune of others during these difficult economic times – you are wrong. We will find you, hold you accountable and help the consumers that you have harmed,” Attorney General Anne Milgram said.

The state alleged in its lawsuit that the defendants required payment in advance during initial consultations and then, after receiving payment, failed to provide consumers with credit counseling, credit repair and/or bankruptcy services. Contrary to defendants’ representations and advertisements, consumers’ credit scores were not raised nor was negative information eliminated from credit reports. There was no admission of liability or wrongdoing by the defendants in settling this matter.

“Consumers in financial trouble are vulnerable to frauds as they seek help and they need to be cautious before paying money to hire anyone who offers assistance,” said David Szuchman, Consumer Affairs Director. “If the result promised sounds to go to be true, it probably is and the consumer may end up in a worse situation.”

The companies had maintained offices in Lakewood, Howell and North Manasquan.

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