A tipster sent me the following message:

NAS has recently declared bankruptcy and has been ordered to sell their accounts. They don’t tell their customers, but any that are not sold by the deadline will be s.o.l. They tried to sell them to their other company, FCS, but are not able to.

I deciphered that NAS was Nationwide Asset Services but I’m not sure who FCS is.

According to court documents, Nationwide Asset Services did file a chapter 11 bankruptcy on November 29, 2011. On April 20, 2012 their attorney requested court permission to sell “the Debtor’s Book of Business, toll free number, website domains, Debt Software license, and intellectual property” for $170,000. The buyer is listed as Brite Solutions. – Source

It appears there are about 1,600 clients involved in this transaction. Here a sample of the client’s as they are described.

Some of the data does not appear to make sense. For example, the first client says they have 43.2 months left in a 43 month program which they started 8/27/2008.

What’s interesting as well is it looks like there may be many clients enrolled in states where the company is not licensed.

As an example, the client listing shows consumers from Minnesota but Minnesota says only the following companies are licensed: PREFERRED FINANCIAL SERVICES, TOUCHSTONE PARTNERS, NEW ERA DEBT SOLUTIONS, CAREONE SERVICES, SUPERIOR DEBT SERVICES, UNITED DEBT COUNSELING, PACIFIC DEBT, DEBTMERICA, J. HASS GROUP, FREEDOM DEBT RELIEF.

It will be interesting to see how Brite Solutions deals with taking on clients in states they do not appear to be licensed in like Minnesota. I wonder what will happen to those consumers? It sure seems like a lot of liability to take on for Brite Solutions.

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Other Related Articles to Read

• Nationwide Asset Services – Let’s Play “Do They Comply”
• How Do I File With The Class Action Lawsuit For GCS? – Suzanne
• Credit Solutions and Florida. Two Sides of The Same Story
• Attorney General Obtains Injunction Against Credit Solutions of America
• Nationwide Asset Services – Scam, Complaint, Review, or Praise?
• The Elusive USOBA Membership List Made Public
• Regulation of Debt Settlement Companies Looming
• SwiftRock Financial Services and Clear Your Debt Slammed in Texas Article
• Brite Solutions – Scam, Complaint, Review, or Praise?
• Credit Solutions of America and American Debt Arbitration, Debt Settlement Companies, Are Sued by State of Florida

Read the full article at GetOutOfDebt.org, click here: Nationwide Asset Services in Bankruptcy to Sell Client Accounts

For those professional readers of the site in the debt relief industry, “Do They Comply” is an old game we’ve played in the past. In this case a debt relief reader wanted me to post information about Nationwide Asset Services to get feedback and opinions from others if this debt relief company was playing by the rules.

I was directed to nationwideasset.com and you will see the information I found below.

Nationwide Asset Services
1990 West Camelback Road
Suite 215
Phoenix, AZ 85015
888-837-2930

What makes the claims of services interesting is that Nationwide Asset Services was sued by the New York Attorney General in 2009 saying, “Nationwide Asset Service promised 25 to 40 percent reductions, but less than 1 percent of its 2,000 New York customers saved that much.” – Source

In February of 2010 the Attorney General of Illinois also filed suit against the company for deceptive practices. – Source

Florida says their is an active investigation ongoing against Nationwide Asset Services as well. – Source

The primary concern of the debt relief industry reader (and thanks for the tip by the way) were the fees being charged.

The site does say there is a setup fee of $399.

I did find a very interesting page on the site that made me wonder what the actual fees being charged are.

This page appears to give the impression that consumers that use the services will “have zero balance in an average of 30-36 months.”

Additionally the chart used to compare costs says the total paid for their service on a $20,000 balance will be $14,400 but they never say if this is inclusive of their fees or they are separate.

All you have to do to play is post a comment about if you think the debt relief company is in compliance with state and federal rules covering debt relief providers.

If you need help to search for rules and regulations, feel free to use the free compliance module on this site.

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Other Related Articles to Read

• Nationwide Asset Services in Bankruptcy to Sell Client Accounts
• Credit Solutions and Florida. Two Sides of The Same Story
• Attorney General Obtains Injunction Against Credit Solutions of America
• Nationwide Asset Services – Scam, Complaint, Review, or Praise?
• The Elusive USOBA Membership List Made Public
• Regulation of Debt Settlement Companies Looming
• SwiftRock Financial Services and Clear Your Debt Slammed in Texas Article
• Credit Solutions of America and American Debt Arbitration, Debt Settlement Companies, Are Sued by State of Florida
• New York Attorney General Wins $200,000 Penalty Against Debt Settlement Company
• Debt Settlement Company Success Rate Made Public – Sucks

Read the full article at GetOutOfDebt.org, click here: Nationwide Asset Services – Let’s Play “Do They Comply”

Here is a great example of two sides of the same event. First from the Florida Attorney General, and then from Credit Solutions.

Which side do you think was victorious?

@GetOutOfDebtGuy

Florida Attorney General Press Release

Attorney General Obtains Injunction Against Debt Settlement Company

~ Credit Solutions’ unfair fees prohibited by temporary injunction ~

TALLAHASSEE, FL – Attorney General Bill McCollum today announced that his office has obtained a temporary injunction against Texas-based Credit Solutions of America, Inc., and Credit Solutions of America, LLC. Hillsborough County Circuit Judge Sam Pendino ruled that these companies are prohibited from charging Florida residents an unfair up-front fee for purported debt settlement services. The ruling was issued from the bench earlier this week, and a written order will follow.

“Financially strapped Florida consumers are turning to these so-called debt-relief businesses as a last resort to try to regain control of their finances, only to lose more money in excessive up-front fees with little or no relief from their debt,” said Attorney General McCollum. “This ruling represents significant progress in reigning in these abusive practices.”

This is the second temporary injunction obtained by the Attorney General in recent months prohibiting debt settlement firms from charging Floridians unlawful fees. In April, Clearwater-based American Debt Arbitration (ADA), and Arizona-based Nationwide Asset Services, Inc. were similarly prohibited from charging unlawful fees.

The lawsuits against Credit Solutions and ADA were both filed in October 2009, and each petitions the court for full victim restitution, permanent injunctive relief, and civil penalties for violation of Florida’s Deceptive and Unfair Trade Practices Act. The Attorney General’s Economic Crimes Division is pursuing these enforcement actions, and litigation remains active.

Just last month, the Federal Trade Commission (FTC) announced the adoption of a new rule to protect consumers in credit card debt who seek debt relief help. Consistent with changes recommended to the FTC by Attorney General McCollum, beginning this October, for-profit companies that sell debt relief service by phone will be prohibited from collecting any fees before successfully settling or reducing a consumer’s outstanding debt obligation. Additionally, starting in September, the FTC will require companies to disclose how much the process could cost and how long it may take consumers to see results.

Consumers should be cautious when signing up with debt settlement firms. Consumers who have been victimized by these companies or other debt relief programs are encouraged to file a complaint with the Attorney General by calling 1-866-NO-SCAM (1-866-966-7226) or by filing a complaint online at http://www.myfloridalegal.com. – Source

From Credit Solutions

Credit Solutions, a market-leading debt settlement company headquartered in Dallas, Texas, won an important victory on behalf of its existing debt-burdened Florida clients in the Hillsborough County Circuit Court. The victory came during a temporary injunction hearing held on August 16 in a case brought by the Florida Attorney General’s Office.

If the current Attorney General had prevailed on his claims at the hearing, thousands of debt-strapped Florida customers who rely on Credit Solutions to help them settle their credit card debts could have been left without a critical ally in this crippled economy. Despite the claims made by the Attorney General’s Office, Credit Solutions clearly established that it should continue to serve its current clients while transitioning its growing business to fit within federal debt relief regulations recently released by the Federal Trade Commission, an exciting process already under way and readily embraced by the Credit Solutions Team.

Credit Solutions helps consumers reduce their credit card debts by bargaining with the credit card companies on behalf of its individual clients. Credit Solutions uses its experience, institutional knowledge and relationships with the credit card lenders to negotiate settlements for its clients.

In 2009, the Florida Attorney General filed a civil lawsuit against Credit Solutions, claiming violations of several state and federal laws. Based on the accusations, the Attorney General’s Office demanded that the court prohibit Credit Solutions from enrolling new customers in the State, from charging fees to its current Florida customers and from advertising via its website. The Attorney General also demanded that the court take several other actions against Credit Solutions. In August, the court rejected a majority of the Attorney General’s requests.

At the most recent hearing on August 16, after considering testimony and weighing evidence of the work Credit Solutions has historically provided to Florida consumers, the Hillsborough Circuit Court denied a majority of the Attorney General’s demands. Instead, the court entered an order requiring Credit Solutions to refrain from collecting an advance fee from any brand new customers in Florida. This is a step Credit Solutions is already in the process of making to comply with the new Federal Trade Commission debt relief rules. The court concluded that its ruling would not apply retroactively and that Credit Solutions could continue to serve its existing Florida customers. In the course of issuing the order, the Court explained as follows: “[P]art of my reasoning is they do provide a service to the consumer. There has been debt reduction and settlements with many, but from this day forward, no advanced fees.”

About Credit Solutions: Market leader Credit Solutions is recognized by the American Business Awards for the “Best Customer Services Department in Financial Services.” A charter policy partner of the United States Organization for Bankruptcy Alternatives (USOBA), Credit Solutions is certified by BSI Management Systems for USOBA best-practice compliance. For more information, visit www.creditsolutions.com. En espanol: http://espanol.creditsolutions.com – Source

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Other Related Articles to Read

• Credit Solutions of America and American Debt Arbitration, Debt Settlement Companies, Are Sued by State of Florida
• Attorney General Obtains Injunction Against Credit Solutions of America
• New York Attorney General Sues Two Debt Settlement Firms for Deceiving and Harming Consumers
• Doug Van Arsdale and Credit Solutions of America Settle With Maine
• Colorado Cancels or Revokes Debt Settlement and Credit Counseling Company Licenses
• Credit Solutions Allegedly Cancels BCBS Health Insurance for Current and Former Employees
• Credit Solutions Announces it Will Comply FTC But Tipster Provides Interesting Info
• Doug Van Arsdale of Credit Solutions of America Loses Awesome Football Season Tickets to IRS
• Class Action Suit by Debt Settlement Employees Started at Credit Solutions of America
• The Elusive USOBA Membership List Made Public

Read the full article at GetOutOfDebt.org, click here: Credit Solutions and Florida. Two Sides of The Same Story

Attorney General Bill McCollum today August 20, 2010 that his office has obtained a temporary injunction against Texas-based Credit Solutions of America, Inc., and Credit Solutions of America, LLC. Hillsborough County Circuit Judge Sam Pendino ruled that these companies are prohibited from charging Florida residents an unfair up-front fee for purported debt settlement services. The ruling was issued from the bench earlier this week, and a written order will follow.

“Financially strapped Florida consumers are turning to these so-called debt-relief businesses as a last resort to try to regain control of their finances, only to lose more money in excessive up-front fees with little or no relief from their debt,” said Attorney General McCollum. “This ruling represents significant progress in reigning in these abusive practices.”

This is the second temporary injunction obtained by the Attorney General in recent months prohibiting debt settlement firms from charging Floridians unlawful fees. In April, Clearwater-based American Debt Arbitration (ADA), and Arizona-based Nationwide Asset Services, Inc. were similarly prohibited from charging unlawful fees.

The lawsuits against Credit Solutions and ADA were both filed in October 2009, and each petitions the court for full victim restitution, permanent injunctive relief, and civil penalties for violation of Florida’s Deceptive and Unfair Trade Practices Act. The Attorney General’s Economic Crimes Division is pursuing these enforcement actions, and litigation remains active.

Just last month, the Federal Trade Commission (FTC) announced the adoption of a new rule to protect consumers in credit card debt who seek debt relief help. Consistent with changes recommended to the FTC by Attorney General McCollum, beginning this October, for-profit companies that sell debt relief service by phone will be prohibited from collecting any fees before successfully settling or reducing a consumer’s outstanding debt obligation. Additionally, starting in September, the FTC will require companies to disclose how much the process could cost and how long it may take consumers to see results.

@GetOutOfDebtGuy

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Other Related Articles to Read

• Credit Solutions and Florida. Two Sides of The Same Story
• Credit Solutions of America and American Debt Arbitration, Debt Settlement Companies, Are Sued by State of Florida
• New York Attorney General Sues Two Debt Settlement Firms for Deceiving and Harming Consumers
• Regulation of Debt Settlement Companies Looming
• SwiftRock Financial Services and Clear Your Debt Slammed in Texas Article
• New York Attorney General Wins $200,000 Penalty Against Debt Settlement Company
• Nationwide Asset Services in Bankruptcy to Sell Client Accounts
• BBB Says Notorious Doug Van Arsdale Still At It With SaveMore.com
• Nationwide Asset Services – Let’s Play “Do They Comply”
• SaveMore.com Sucks. Doug Van Arsdale of Credit Solutions Fame Back in the News.

Read the full article at GetOutOfDebt.org, click here: Attorney General Obtains Injunction Against Credit Solutions of America

Please share your experience with this debt relief company and provide your review and feedback, in the comments section below.

The goal of this page is to allow people to share information that may be important to help others to make a more informed decision regarding their experience with this debt relief company. Here are some potential questions you might be able to provide feedback about.

• How did you feel about the customer service experience you received?
• Was the company easy to communicate with before or after you became a client?
• Did the company respond to your communications promptly?
• What were the fees charged for the services you received?
• Did the company give you the terms and conditions for the program you were interested in before you gave them any personal information?
• Was the program successful for you and accomplish the goals you had when you entered the program?
• Did you have a really good experience you can share?
• Did you have a bad experience you want to share?
• Is there any other information you’d like people to know that might be considering the services of this company?

It is important to understand when reading comments below that they are the opinions of the individual posters and may not be representative of the overall impression of all consumers that may have or have not used the debt relief services of this company. But everyone does deserve to have an opportunity to express their opinion, even the debt relief company itself, be it good, bad, or indifferent.

@GetOutOfDebtGuy

Other Related Articles to Read

• The Elusive USOBA Membership List Made Public
• Nationwide Asset Services in Bankruptcy to Sell Client Accounts
• Nationwide Asset Services – Let’s Play “Do They Comply”
• Credit Solutions and Florida. Two Sides of The Same Story
• Attorney General Obtains Injunction Against Credit Solutions of America
• Regulation of Debt Settlement Companies Looming
• SwiftRock Financial Services and Clear Your Debt Slammed in Texas Article
• Credit Solutions of America and American Debt Arbitration, Debt Settlement Companies, Are Sued by State of Florida
• New York Attorney General Wins $200,000 Penalty Against Debt Settlement Company
• Debt Settlement Company Success Rate Made Public – Sucks

Read the full article at GetOutOfDebt.org, click here: Nationwide Asset Services – Scam, Complaint, Review, or Praise?

Below you will find a document that was given to me by a USOBA member with a soul. They sent it to me at tips@getoutofdebt.org.

I’ve actually had this for some time and I was giving the United States Organization of Bankruptcy Alternatives (USOBA) multiple chances to release to me a current membership list. After repeated requests, they simply ignored my requests and would not release a current listing. It has been reported this list may contain some AADMO members as well sine the two groups shared a management affiliation.

So I’m releasing the version I have below since John Ansbach of USOBA said it should be published during his Senate testimony yesterday.

Since USOBA will neither confirm or deny their members I am not sure at what point in time this membership list represents and it may be incomplete as of today since the claim at the Senate hearing yesterday was they has 200 members.

@GetOutOfDebtGuy

1. A.R. Trust Services – artrustservices.com
2. Able Debt Settlement – abledebtsettlement.com
3. Absolute Debt Solutions – absolutedebtsolutions.com
4. Accelerated Debt Management Group – debtacc.com
5. Achievable Financial Solutions – achievablefinancialsolutions.com
6. Achieve Financial Security – achievesecurity.com
7. AcuShield – acushieldfinancial.com
8. Affnet – affnet.com
9. Affordable Debt Solutions – affordabledebtsolutions.com
10. Alliance Debt Relief – alliancedebtrelief.com
11. AmerAssist – amerassist.biz
12. American Debt Counseling – myadc.org
13. American Debt Foundation – americandebtfoundation.com
14. American Debt Negotiator – adnow.com
15. American Financial Service – 1afs.com
16. American Home Mortgage – americanhm.com
17. American Liberty Financial – americanlibertyfinancial.org
18. American No Debt – americannodebt.com
19. Amerix Client Management – amerix.com
20. Apex Client Management – emergencydebtrelief.com
21. Apex Financial Services – apexdebtsolutions.com
22. Arbitronix – arbitronix.com
23. Axiom Financial Solutions – axiomfinancialsolutions.com
24. Bella Financial – bellafinancial.com
25. Benefits Direct – benefitsdirectllc.com
26. Capital Support Services – freedomfirstfinancial.com
27. Capsaw – cleardebtsolution.com
28. CareOne Services – ascendone.com
29. Consumer Credit and Budget Counseling – cc-bc.com See comment below.
30. Century Negotiation – centuryni.com
31. Certified Debt Solutions
32. Choice One Financial
33. Christian Debt Consolidation – christiandebtconsolidation.org
34. Christian Debt Consultants – christiandebtconsultants.com
35. Clear Debt Results – cleardebtresults.com
36. ClearOne Debt Relief – clearonedebt.com
37. Commercial Credit Counseling Services – dontdeclare.com
38. Commercial Debt Counseling Corporation – commercialdebtcounselingcorporation.com
39. Consumer Debt Intervention – consumerdi.com
40. Consumer Debt Relief Group – consumerdebtrelief.com
41. Consumer Legal Services America
42. Credit Consultants – ccdebthelp.com
43. Credit Shelter –
44. Credit Solutions – creditsolutions.com
45. Debt Acquisition Partners
46. Debt Alliance Services – debtalliancellc.com
47. Debt by Debt – debtbydebt.com
48. Debt Consultants of America – 4dcoa.com
49. Debt Reduction America – debtreductionamerica.com
50. Debt Relief Center – debtreliefcenter.net
51. Debt Relief Foundation – debtrf.com
52. Debt Relief Network – debtreliefnetwork.com
53. Debt Relief of America – 4dra.com
54. Debt Relief Options – debtreliefoptions.org
55. Debt Settlement America – debt-settlement-america.com
56. Debt Shield – debtshield.net
57. Debt Solutions Group – debtsolutionsgrp.com
58. Debt Solutions Network – debtsolutionsnetwork.com
59. Debtco – debtco.com
60. DebtPointer – debtpointer.com
61. Debtronic – debtronic.com
62. DebtXS – dxs.com
63. Direct Debt Solutions – debtplan.biz
64. DoccuSign – doccusign.com
65. DTS Financial – neweradebtsolutions.com
66. EFA Data Processing – efaprocessing.com
67. Elite Financial Solutions – thefinancialsolution.net
68. Emergency Debt Relief – emergencydebtrelief.com
69. Enlightened Atlantic Debt – enlighteneddebt.com
70. EOS-3 – eos-3.com
71. Fast Debt Solutions – fastdebtsolutions.com
72. Fidelity Debt Solutions – fidelitydebtsolutions.com
73. Fidelity Reserves Corporation – fidelityreserves.com
74. Financial Freedom of America – financialfreedomofamerica.com
75. Financial Independence & Resource Education – fire-inc.net
76. Financial Solutions Consultants
77. Financira Services – financira.com
78. First American Debt Relief – firstamericandebtrelief.com
79. First American Debt Solutions
80. Forecast Financial – ffcdebthelp.com
81. Freedom Financial – freedomdebtrelief.com
82. Freedom First Financial – freedomfirstfinancial.com
83. Freedom Settlement Association
84. Fresh Start Financial Solutions
85. GHS Solutions – ghsdebtsolutions.com
86. Global Client Solutions – globalclientsolutions.com
87. Global Debt Services – globaldebtservices.com
88. Greenspoon Marder – greenspoonmarder.com
89. Hispanic Credit Solutions – hispaniccreditsolutions.com
90. Infra-Strategy – infra-strategy.com
91. Intermark Media – intermarkmedia.com
92. Kaitlyn Financial
93. King Debt Solutions – kingdebtsolutions.com
94. KVIS – kvisllc.com
95. LeadPoint – leadpoint.com
96. Leads360 – leads360.com
97. Leads99 – leads99.com
98. Liberty Debt Advisors – libertydebtadvisors.com
99. Liberty Debt Management – libertydebt.com
100. Liquidebt
101. Manageable Debt Solutions – manageabledebtsolutions.com
102. Mantis Debt Relief – mantisdebtrelief.com
103. Money Matters Financial Services
104. Mortgage Options Financial – mortgageoptionsfinancial.com
105. National Debt Cures – natdebtcures.com
106. National Debt Group – thenationaldebtgroup.com
107. National Debt Solutions – nationaldebtsolutions.net
108. National Settlements
109. National Support Services
110. Nationwide Asset Services – nationwideasset.com
111. Nationwide Credit Solutions – ncsdebtfree.com
112. Nationwide Financial Solutions – nationwidefinancialsolutions.com
113. Nationwide Tax Relief – nationwidetaxrelief.com
114. Negotiated Financial
115. New Beginnings Debt Settlement – newbeginningsonline.com
116. New Horizons Debt Relief – newhorizonsdebtrelief.com
117. New Life Debt Relief – newlifedebtrelief.org
118. Newport Financial Services – nfs1.org
119. No More Mortgage – nomoremortgage.com
120. Noteworld – noteworld.com
121. Patriot Debt Solutions – patriotdebt.com
122. Practical Debt Solutions – practicaldebtsolutions.com
123. Preferred Financial Services – pfs1.net
124. Preferred Companies – preferredcompanies.org
125. Premier Institute for Financial Freedom – pifff.org
126. Prestige Financial Solutions – prestigefinancialsolutions.com
127. Prime Debt Soft – primedebtsoft.com
128. Private Debt Solutions – privatedebtsolutions.com
129. Provanta – provantacorp.com
130. QuinStreet – quinstreet.com
131. Renaissance Debt Solutions – gogetoutofdebt.com
132. Rescue Debt
133. ResQDebt – greenfieldfinancial.com
134. Resurgent Capital Services – resurgent.com
135. S & D Financial Services – sndfs.com
136. Savings First Debt Solutions – savingsfirst.com
137. Sierra Financial Solutions – 1sfs.org
138. Sun Coast Credit Services – scservicesonline.com
139. Superior Debt – superiordebt.com
140. The Debt Mediator – thedebtmediator.com
141. The Debt Reduction Group – knockoutdebt.com
142. The Debt Settlers
143. The EDA Group – theedagroup.com
144. Titan Financial Partners – titanfinancialpartners.com
145. TK Financial Services – tkfinancialservices.com
146. Total Financial Freedom
147. Tower Legal Network – getdebtfree.com
148. Turning Point Debt Relief – turningpointdebtrelief.com
149. Twin Debt Management – twindm.com
150. U.S. Consumer Advocate – usconsumeradvocate.com
151. United Consumer Services – unitedconsumerservices.com
152. Universal Debt Reduction – universaldr.com
153. US Debt Settlement – usdebtsettlement.com
154. US Financial Management – usfmgroup.com
155. Vortex Media Group – vortexmediagroup.com
156. Whitestar Financial Services – whitestarfinancialservices.com
157. World Class Debt Services – americanfinancialservice.net
158. Xtra Marketing Services – xtramarketingservices.com
159. YDebts – ydebts.com
160. Yellow Brick
161. Zero Debt – zerodebt.com

Other Related Articles to Read

• International Association of Professional Debt Arbitrators – IAPDA Certification Exposed
• Scott Law Group Debt Settlement Litigation List Contains Some New Companies
• Target List of Debt Settlement Companies in Washington
• Regulation of Debt Settlement Companies Looming
• New York Attorney General Announces Nationwide Investigation Into Debt Settlement Industry
• Debt Relief Companies Targeted by Scott Law Group in Washington
• AFCC -35, TASC – 41. Lost in Translation? Bermuda Triangle of Debt?
• Debt Management Company to Pay $4.5 Million to Settle Debt Management Complaints
• Kentucky Signs Into Law New Tough Debt Adjusting Law That Regulates Debt Settlement Companies and Others
• New York Times: Debt Settlement Industry is Nervous

Read the full article at GetOutOfDebt.org, click here: The Elusive USOBA Membership List Made Public

This is a guest post by Kenneth Long, President of Fiscal Progress. If you would like to submit a guest post for publication, just send me an email to guestpost@getoutofdebt.org.

Steve

On September 25, 2008 the Federal Trade Commission (FTC) held a public workshop to explore the for-profit debt settlement industry. Panelists representing debt settlement companies, consumer advocates, regulators and other interested parties weighed in on the effects that debt settlement companies have on consumers.

The Association of Debt Settlement (TASC) actively participated in the workshop on behalf of its member companies. It touted research by Dr. Richard Briesch claiming that debt settlement companies provide greater welfare to debtors than credit counseling organizations. However, a detailed review of his study reveals major flaws in the findings and in the conclusions.

Since that time, there has been no change in federal laws regarding debt settlement companies. States however have been active.

New York, in particular has taken strides to curb abuses by several leading debt settlement companies. The Attorney General began investigating Credit Solutions of America and Nationwide Asset Services. Nationwide Asset Services was penalized $198,100 for fraud and deceptive advertising. In May 2009, Attorney General Mario Cuomo announced a national investigation of debt settlement companies. In his announcement, Cuomo labeled debt settlement as a “rogue industry.”

Cuomo’s office issued subpoenas to 14 debt settlement companies and 1 law firm as a part of this broader investigation. Companies that received subpoenas include: Allegro Law, American Debt Foundation, Inc.; American Financial Service; Consumer Debt Solutions; Credit Answers, LLC; Debt Remedy Solutions, LLC; Debt Settlement America; Debt Settlement USA; Debtmerica Relief; DMB Financial, LLC; Freedom Debt Relief; New Era Debt Solutions; New Horizons Debt Relief Inc.; Preferred Financial Services, Inc.; and U.S. Financial Management Inc.

Since that time, Allegro Law has already been shut down by regulators in Alabama. $12 million in assets were seized for the purposes of providing refunds to clients defrauded by the debt settlement company. Clients of Allegro Law are expected to receive average refunds of about $800, even though they paid in thousands of dollars.

Clients of another large debt settlement company that was shut down were paid only 25% of their total deposits in December, 2009. That firm, Hess Kennedy and its related entity, the Consumer Law Center defrauded clients out of funds that they thought were being used for settlements.

In these cases, clients were lead to believe that actual attorneys would be working on their behalf to negotiate settlements. In all actuality, lawyers at these firms spend all of their time just trying to delay legal action so that they can earn their profits and get out. At Hess Kennedy, only Laura Hess was a licensed attorney. The other partner in the firm reportedly held no law license.

Rampant abuse in the debt settlement industry has caused Attorneys General in Colorado, Minnesota, West Virginia, North Carolina, Florida and Texas to go after individual debt settlement companies directly. They are trying to stop the deceptive advertising, fraud and fleecing of debtors of what little money they have left.

In the case of Nationwide Asset Services, the Attorney General found that less than 1% of its clients actually received the promised 25 to 40 percent reduction in their debt. Interestingly, Nationwide Asset Services was also required to report on 180 of their clients who actually did complete their plans, yet paid more in settlements and fees than they owed before they even started the plan.

Creditors are no better fans to debt settlement companies than state regulators. They must normally sue a client of a debt settlement company in order to be able to collect their balances, since the client stops paying them in order to fund their debt settlement plan. Creditors would much rather clients go through credit counseling so that they can begin repaying their balances at improved terms while receiving counseling and education.

Since the FTC has been inundated with calls for regulation of banking and securities industries, they have largely overlooked the debt settlement industry since the 2008 workshop. However, the states are becoming more active in protecting their residents from fraud. As a result, several debt settlement companies representing the bulk of debt settlement clients are facing legal challenges from multiple states.

Those companies that continue to use deceptive advertising to promote their high-priced services will face the most legal action. As more states increase their regulation of the debt settlement industry, the FTC will ultimately be forced to increase regulation of this “renegade industry” to increase protection to all Americans.

In the mean time, consumers should be skeptical about claims by companies who promise to help. They should have a favorable rating with the Better Business Bureau or otherwise be free of patterns of complaints. Most importantly, if it sounds too good to be true, it probably is.

Other Related Articles to Read

• New York Attorney General Announces Nationwide Investigation Into Debt Settlement Industry
• International Association of Professional Debt Arbitrators – IAPDA Certification Exposed
• The Elusive USOBA Membership List Made Public
• Scathing Report From Allegro Law Debt Settlement Bankruptcy Drags In Others
• Colorado Cancels or Revokes Debt Settlement and Credit Counseling Company Licenses
• AFCC -35, TASC – 41. Lost in Translation? Bermuda Triangle of Debt?
• Report From the TASC Conference. Attendee Sends in Their Notes,
• Credit Solutions and Florida. Two Sides of The Same Story
• Attorney General Obtains Injunction Against Credit Solutions of America
• I Am Skeptical About Faxing My 16 Page Contract to Freedom Debt Relief Since We Originally Contacted Debtmerica

Read the full article at GetOutOfDebt.org, click here: Regulation of Debt Settlement Companies Looming

Out of Austin, Texas today comes the following warning to consumers.

Two Austin debt-settlement firms have been sued by the Illinois attorney general, which alleges that they use deceptive marketing practices, charge excessive fees and do little to help consumers get out of their financial trouble.

The Better Business Bureau of Central Texas has given Clear Your Debt and SwiftRock Financial Services their lowest rating, an F.

The bureau said it had received consumer complaints about the companies. The bureau said the companies responded by “citing their respective contracts and related disclaimers.”

The Illinois lawsuits, filed last month, name Clear Your Debt, SwiftRock and Orion Processing, which operate in Austin and Lago Vista.

Attorney General Lisa Madigan also sued Debt Consultants of America, based in Dallas; Endebt Solutions, in Long Beach, Calif.; American Debt Arbitration, based in Clearwater, Fla., and Nationwide Asset Services, in Phoenix.

The Better Business Bureau says the companies offer to help consumers settle debts by debiting their bank account a fee each month. But some consumers told the bureau that the companies had not lowered their debt and that they continued to get calls from creditors demanding payment.

One woman said she was forced into bankruptcy because SwiftRock didn’t live up to its promises.

Source

@GetOutOfDebtGuy

Other Related Articles to Read

• Clear Your Debt, Endebt Solutions, Debt Consultants of America, DebtOne Financial, American Debt Arbitration – Sued by Illinois
• Credit Solutions and Florida. Two Sides of The Same Story
• Attorney General Obtains Injunction Against Credit Solutions of America
• Credit Solutions of America and American Debt Arbitration, Debt Settlement Companies, Are Sued by State of Florida
• New York Attorney General Wins $200,000 Penalty Against Debt Settlement Company
• New York Attorney General Sues Two Debt Settlement Firms for Deceiving and Harming Consumers
• Nationwide Asset Services in Bankruptcy to Sell Client Accounts
• Clear Your Debt, Global Client Solutions Case Kicked Out of Ohio Court to Arbitration
• Nationwide Asset Services – Let’s Play “Do They Comply”
• Global Client Solutions, Clear Your Debt, Orion Processing, Derin Scott, Shannon Scott and Pradeep Nair Hit With Lawsuit

Read the full article at GetOutOfDebt.org, click here: SwiftRock Financial Services and Clear Your Debt Slammed in Texas Article

Florida Attorney General Bill McCollum today announced his office has filed two lawsuits on behalf of Florida consumers against five debt settlement-related companies. According to the Attorney General’s lawsuits, the businesses promised consumers they could pay off their debts for a fraction of the amount owed, but instead collected large up-front fees and left customers with little or no money to pay creditors.

“These victims were hit with a one-two punch: they paid substantial up-front fees for services not provided as promised, then ended up with increased debt, ruined credit, lawsuits, bankruptcy and more,” said Attorney General McCollum.

One of the lawsuits was filed against Texas-based CSA-Credit Solutions of America, Inc., a self-proclaimed debt settlement industry leader. The lawsuit alleges that CSA unlawfully charges significant advance fees before completing or, in many instances, commencing performance of its debt settlement services. CSA offers to settle consumers’ debts at approximately 50 percent of their balance within 12-36 months and, according to the lawsuit, falsely represents the success rate of its program.

Under the CSA plan, consumers are instructed to stop paying their creditors and start a savings account supposedly to accumulate enough funds to allow CSA to negotiate a lump sum payoff of the debt. However, for the first three months, CSA withdraws 85 percent of the funds for its own fees, leaving the consumers with little or no money to negotiate a settlement with their creditors. Additionally, while the consumer is trying to save enough for the lump sum payoff, he or she may suffer increased penalties for nonpayment to creditors, lawsuits, damage to credit scores, bankruptcy and more. The Attorney General’s Office has over 140 complaints, but estimates the company has thousands of Florida victims.

“We see clients who are desperate for help after being victimized by disreputable debt relief companies,” said Thomas DiFiore, Staff Attorney and Team Leader for the Bay Area Legal Services Inc. “The Attorney General’s consumer protection initiative is exactly what our clients need.”

The second lawsuit filed names Clearwater-based ADA of Tampa Bay, Inc., which does business as American Debt Arbitration. The lawsuit also names the company’s principal Glenn P. Stewart, as well as Arizona-based entities Nationwide Asset Services, Inc., Service Star, LLC, and Universal Debt Reduction, LLC. The lawsuit alleges the defendants promise to help consumers pay off their debts at significant savings, but fail to adequately disclose the true cost of their services. Also allegedly withheld from consumers is the fact that the companies collect at least the first three months’ of payments as fees, in violation of Florida law, before the consumer can start accumulating any funds for settlement and before any services begin. During the “savings” period, consumers are counseled to cease all payments to and communications with their creditors. As a result, consumers suffer great financial harm and can be subject to increased penalties and lawsuits.

The lawsuit against CSA has been filed in Hillsborough County Circuit Court, and the lawsuit against ADA, et al has been filed in Pinellas County Circuit Court. Both lawsuits petition the court for full victim restitution, injunctive relief, and civil penalties for each violation of Florida’s Deceptive and Unfair Trade Practices Act.

The Attorney General’s Economic Crimes Division has been focusing on abuses within the debt settlement and debt relief industries and continues to actively investigate and pursue cases in this area. Debt relief services under review include debt settlement, debt management, debt negotiation, credit counseling, credit repair, and credit card rate reduction services. The office is currently investigating the practices of over 70 debt relief companies and is litigating five cases.

Consumers should be cautious when signing up with debt settlement firms. Consumers who have been victimized by these companies or other debt relief programs are encouraged to file a complaint with the Attorney General by calling 1-866-NO-SCAM or by filing a complaint online at http://www.myfloridalegal.com.

• You can read the CSA Lawsuit here.
• You can read the ADA debt settlement lawsuit here.

@GetOutOfDebtGuy

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• New York Attorney General Wins $200,000 Penalty Against Debt Settlement Company
• New York Attorney General Sues Two Debt Settlement Firms for Deceiving and Harming Consumers
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Read the full article at GetOutOfDebt.org, click here: Credit Solutions of America and American Debt Arbitration, Debt Settlement Companies, Are Sued by State of Florida

Attorney General Andrew M. Cuomo today announced that his office has won a lawsuit against a national debt settlement company, barring the company from doing business in New York state unless it posts a $500,000 performance bond to protect consumers. The decision also levies nearly $200,000 in penalties against the company for defrauding thousands of New Yorkers who looked to the company to negotiate reductions in their personal debt.

As a result of the lawsuit filed in May, the Hon. Patrick H. NeMoyer in Erie County Supreme Court issued a decision that bars Nationwide Asset Services, Inc. (NAS), based in Phoenix, Arizona, along with its affiliates, from doing business in New York state unless it files a $500,000 performance bond to protect consumers. Additionally, Cuomo’s office obtained a civil penalty of $198,100 after the court determined that nearly 1,981 consumers were defrauded.

The court found that the majority of NAS customers were promised a 25 to 40 percent reduction in their outstanding debt but never saw such reductions. Only one-third of one percent of consumers received such savings. The other customers suffered continued harassment and lawsuits by creditors and had their credit ratings destroyed.

“This company made promises to people who were searching for financial help and trying to turn their lives around,” said Attorney General Cuomo. “But the promises never came true and, in many cases, New Yorkers were left in worse condition than when they started. Thanks to this ruling, the company has to put its money where its mouth is with a performance bond if it wants to do business in New York.”

The court’s decision also orders NAS to compute restitution for 180 consumers who successfully completed the program but actually paid more in fees and settlements than the amount originally due on their debts. NAS has been ordered to compute this consumer restitution and the specific amounts will then be verified by the Attorney General’s Office and the court.

The Attorney General’s investigation and suit determined that NAS and its affiliates, ServiceStar LLP and Universal Debt Reduction, LLC, and its marketer, FGL Clearwater, Inc. d/b/a American Debt Arbitration, based in Florida, engaged in fraudulent and deceptive business practices and false advertising and made significant profits by selling misleading debt settlement plans that very rarely delivered the promised benefits to consumers dealing with debt.

Debt settlement companies represent that they can substantially reduce consumer debt by negotiating directly with creditors, on behalf of their customers, to pay off outstanding balances at less than the amounts owed. However, Attorney General Cuomo’s Office has found that many of these debt settlement plans are often flawed and, based upon complaints, often mislead consumers about the nature of their services. The debt settlement plans are generally premised on consumers’ aggregating savings, over one to three years, from which both the payment of the company’s fees and any negotiated settlement are to be made. Yet most consumers who are targeted by these companies are unable to meet the savings requirements because of their already-precarious financial situation.

In addition, the companies often take their substantial fees up-front and keep these fees even when they do not provide the promised services. As a result, many consumers find themselves worse off financially because of these debt settlement plans.

As part of his broad investigation of the debt settlement industry, Cuomo issued subpoenas to multiple debt settlement companies and affiliated businesses. The investigation has sought to uncover how these companies structure their fees, how many people have actually benefited from their services, and what kinds of relief are the companies actually providing.

@GetOutOfDebtGuy

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• Debt Settlement Company Success Rate Made Public – Sucks
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Read the full article at GetOutOfDebt.org, click here: New York Attorney General Wins $200,000 Penalty Against Debt Settlement Company

Nationwide Asset Services, a company under investigation by the New York Attorney General, has disclosed that while Nationwide Asset Services promised consumers debt reductions of between 25 to 45 percent, in fact only 64 customers out of 1,981 actually completed the debt settlement plan.

This means that 97% of people that enrolled in the debt settlement program not only did not achieve those savings, but did not complete the program as well.

But retiree, Doreen Melton, says her experience with a company called Nationwide Asset Services didn’t save her money, it cost her thousands. “It sounded so good,” said Doreen. “We paid $1,800.”

Doreen and her husband Barry from Lewiston, New York signed up with NAS to help pay off $15,000 of debt. The couple says they paid $1,800 in upfront fees and were instructed to make no further payments on their credit cards. “Every month I wasn’t making payments, and every month they would add a late fee and an over the limit fee. And this was on every card. I kept getting phone calls all day long. 99% of the calls were creditors.”

The Meltons say that over the course of two years they paid NAS more than $11,000, but that the company only settled slightly more than half of their original $15,000 debt. “It’s very upsetting because our credit is destroyed.”

@GetOutOfDebtGuy

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Read the full article at GetOutOfDebt.org, click here: Debt Settlement Company Success Rate Made Public – Sucks

Attorney General Andrew M. Cuomo today announced a new development in his nationwide investigation into the debt settlement industry, filing suit against two debt settlement companies for fraudulent business practices and false advertising. Cuomo filed suit against CSA-Credit Solutions of America, Inc. (“CSA”), based in Richardson, Texas, which is one of the largest debt settlement companies in the country. He has also filed suit against Nationwide Asset Services, Inc. (“NAS”), based in Phoenix, Arizona, along with its affiliates – ServiceStar LLP and Universal Debt Reduction, LLC – and its marketer, FGL Clearwater, Inc. d/b/a American Debt Arbitration, based in Florida.

Cuomo also today launched a website – www.NYDebtHelp.com – that explains consumer rights, allows victims of debt settlement companies quick access to the Attorney General’s office to file complaints, and outlines the stages of the Attorney General’s investigation. Earlier this month, the Attorney General subpoenaed fourteen debt settlement companies and one law firm as part of his ongoing investigation.

According to the Attorney General’s lawsuits, Credit Solutions of America and Nationwide Asset Services have engaged in fraudulent and deceptive business practices and false advertising in connection with their debt settlement businesses. These companies have made millions of dollars on the backs of New Yorkers by selling misleading debt settlement plans that very rarely deliver the promised benefits to consumers dealing with debt. The lawsuits seek to obtain restitution and damages for consumers and to prevent these companies from engaging in deceptive practices.

“These companies are taking advantage of people in New York and throughout the entire country who are facing tremendous economic hardship,” said Attorney General Cuomo. “These companies claim to be the light at the end of the tunnel, but time after time they have shown that they only add to the burdens of Americans dealing with debt. Today’s lawsuits send a clear message that we are prepared to rein in this unregulated industry and protect New Yorkers who are proactively trying to work their way out of debt.”

Debt settlement companies represent that they can substantially reduce consumer debt by negotiating directly with creditors, on behalf of their customers, to pay off outstanding balances at less than the amounts owed.

Approximately 18,000 New Yorkers signed up as customers of Credit Solutions of America between its inception in January 2003 and September 2008. CSA promised a sixty percent reduction in its consumers’ outstanding debt, but an average of one percent of consumers received that savings. Many consumers have faced continued harassment and lawsuits by their creditors, despite CSA’s promise to intervene on their behalf. CSA has collected approximately $17 million in fees from New York-based consumers.

Approximately 2,000 New Yorkers became customers of Nationwide Asset Services, Inc. between January 2005 and May 2008. NAS promised a twenty-five to forty percent reduction in its consumers’ outstanding debt, but only one-third of one percent of consumers received that savings. Customers suffered continued harassment and lawsuits by creditors and had their credit ratings destroyed.

President & CEO of the Empire Justice Center Anne Erickson said, “We commend Attorney General Cuomo for fighting the fraud and abuse that have become characteristic of the unregulated debt settlement industry. Many of the companies in this industry are simply taking advantage of consumers who are working hard to manage their debt obligations. They prey on desperation, offering false hope and no help, often driving these consumers even further into debt and ruining their credit. The Attorney General’s recent actions should put all bad actors on notice. The time to clean up this industry is long overdue and we applaud the Attorney General for recognizing and responding to this critical need.”

National Consumer Law Center Deputy Director Carolyn Carter said, “Debt settlement companies that are fraudulent leave consumers in worse shape and with less money. I applaud Attorney General Cuomo for taking on this industry and working on behalf of the millions of hard-working Americans who are dealing with debt.”

As part of his broad investigation of the debt settlement industry, earlier this month Cuomo issued subpoenas to fourteen debt settlement companies and one law firm. The subpoenas included requests designed to uncover the companies’ fee structures, how many people have benefitted from the companies’ services, and what kind of relief the companies are actually providing.

The debt settlement plans offered by these companies are often flawed and, based upon consumer complaints, it appears that many consumers are being misled regarding the nature of the services offered by these companies. The debt settlement plans are generally premised on consumers aggregating savings, over one to three years, from which both the payment of the company’s fees and any negotiated settlement are to be made. Yet most consumers who are targeted by these companies are unable to meet the savings requirements because of their precarious financial situation. In addition, the companies often take their fees up front and keep these fees even when they do not provide the promised services.

Some debt settlement companies urge consumers to seek additional sources of funds. Credit Solutions of America suggested that consumers mow lawns, cut down on car insurance, borrow from their neighbors and church, as well as sell their blood plasma to garner additional funds. Even for those consumers who can meet the requirements set out by a plan, their amount of aggregated savings is ordinarily insufficient to settle their debts. As a result, many consumers find themselves worse off financially because of these debt settlement plans.

Many consumers may benefit more from working directly with their creditors, seeking credit counseling, or consulting an attorney about filing for bankruptcy. Additionally, even when enrolled in a debt settlement plan, consumers are often still subjected to collection efforts and lawsuits filed by their creditors. Consumers are even told not to discuss their debt situation with creditors.

Consumers who believe they are being defrauded by a debt settlement company are urged to contact the Attorney General’s office at 800-771-7755 or www.oag.state.ny.us.

The lawsuit against Nationwide Asset Services, Inc. is being handled by Assistant Attorney General James Morrissey of the Attorney General’s Buffalo Regional Office. The lawsuit against Credit Solutions of America, Inc. is being handled by Assistant Attorney General Herbert Israel, Special Assistant Attorney General Stephen Mindell, Senior Enforcement Counsel David Holgado, and Acting Deputy Chief Darcy Goddard, under the supervision of Consumer Frauds Bureau Chief Joy Feigenbaum.

@GetOutOfDebtGuy

Other Related Articles to Read

• New York Attorney General Wins $200,000 Penalty Against Debt Settlement Company
• Credit Solutions of America and American Debt Arbitration, Debt Settlement Companies, Are Sued by State of Florida
• Credit Solutions and Florida. Two Sides of The Same Story
• Attorney General Obtains Injunction Against Credit Solutions of America
• Debt Settlement Companies May Not Be Paid For Services Not Yet Delivered Says MO AG
• The Elusive USOBA Membership List Made Public
• Regulation of Debt Settlement Companies Looming
• SwiftRock Financial Services and Clear Your Debt Slammed in Texas Article
• Maine AG Queues Up and Sues Credit Solutions of America.
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Read the full article at GetOutOfDebt.org, click here: New York Attorney General Sues Two Debt Settlement Firms for Deceiving and Harming Consumers