Enhanced Servicing Solutions and Thomas Roland have been sued by the Colorado Attorney General for offering services to Colorado residents through unregistered debt management services. This appears to be a follow-up action by AG Suthers after he took action recently and sued the Johnson Law Group, which Roland has a controlling role in for offering debt settlement and debt management service in Colorado.
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The official statement from the Ags office says:
“DENVER — Colorado Attorney General John Suthers announced June 14, 2011 that his office has filed a lawsuit against Enhanced Servicing Solutions, of Orlando, Fla., and its president, Thomas Roland, on suspicion that they engaged in unregistered debt management services for Colorado consumers.
According to the complaint, Enhanced Servicing Solutions provided “back end” debt management services for the Johnson Law Group, another Orlando, Fla.-based company the Office of the Attorney General recently filed a consumer protection lawsuit against. Enhanced Servicing Solutions is suspected of failing to register with the state of Colorado to comply with the Colorado Debt Management Services Act. According to the complaint, filed in Denver District Court, Enhanced Servicing Solutions ignored not only a December 17, 2010 letter from the state apprising it of Colorado’s registration requirements, but also did not respond to a January 25, 2011 subpoena.”
The complaint provides some additional details.
It appears this is yet another lawsuit against a backend servicing company that drags them in as an entity that should be licensed under state regulations. These are issues that Global Client Solutions and Noteworld have been trying to beat back in their claims they should not be regulated by states as debt relief providers. Unfortunately Global Client Solutions lost that argument miserably with the State of Washington Supreme Court.
From the suit:
- Defendant ESS provides back-end support services to debt-settlement companies. Among other things, ESS negotiates with creditors on behalf of its clients’ (the debt-settlement companies) customers to settle the customers’ debts for less than the principal amount of the debt.
- In addition, ESS provides back-end support services to credit-counseling companies. Specifically, ESS negotiates with creditors on behalf of its clients’ (the creditcounseling companies) customers to have the creditors reduce finance charges or fees for late payments.
- Thus, ESS is a Provider of debt-management services under the DMSA. See C.R.S. § 12-14.5-202(10).
- Through ESS’s client The Johnson Law Group, PLLC (“JLG”), the State learned that ESS has provided debt-management services to Colorado residents on behalf of JLG.
- According to JLG’s records, ESS negotiated with creditors on behalf of 297 of JLG’s Colorado customers between January 1, 2008 and March 3, 2010.
- ESS, however, has failed and refused to obtain a certificate of registration from the Administrator.
- Moreover, the contracts under which ESS has provided debt-management services on behalf of JLG do not comply with the DMSA. In particular, those contracts fail to comply with the following subsections of C.R.S. § 12-14.5-219:
- (a)(2) and (4), providing that agreements must be signed and dated by the Provider, and must disclose the Provider’s name, business address, and telephone number;
- (a)(6), requiring that certain disclosures be made;
- (d)(1), (2), and (3), requiring that agreements contain certain disclosures;
- (e), mandating that the powers of attorney contain certain restrictions; and
- (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 consumers on whose behalf ESS 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” disclosure, in violation of C.R.S. § 12-14.5-217(d), (e), and (g).
- Still further, the contracts under which ESS provided debt-management services provide for a $30 fee to access credit reports, in violation of C.R.S. § 12-14.5-223(a).
- After learning of ESS’s relationship with JLG, the State attempted to investigate ESS’s other business activities in the State of Colorado. On December 17, 2010, the State sent Defendants a letter inquiring into Defendants’ business practices, and requesting that ESS provide certain information to the State on or before December 31, 2010.
- ESS failed to respond to the State’s letter.
- Therefore, on or about January 25, 2011, the State served ESS with a Subpoena, to which ESS was required to respond on or before February 22, 2011.
- ESS, however, failed to respond to the Subpoena. – Source
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