Credit Solutions and Florida. Two Sides of The Same Story

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?

Damon Day - Pro Debt Coach

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.

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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.”

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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

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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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