A class action suit has just been moved to federal court in Georgia. The suit is Davenport v. Fresh Start Advisors, Fresh Start Advisors of Boca Raton East, Fresh Start Advisors of Boca Raton West, Fresh Start Advisors of Lauderhill, Fresh Start Solutions, Settlement Management, WPB Partners, Flow Capital Ventures, Debt Settlement Solutions, National Settlement Solutions, Discount Debt, jason Simons, Andrew Myers, William Blotnick, Richard Odle, Albert Auer, Michael Gamick, Karl Bucholz, Douglas Gass, Pasquale Paolini. (1:11-cv-02319-SCJ)
The statements below are drawn from the complaint filed.
The case is similar to others filed over the past year or so. It alleges the Defendants violated state debt adjusting laws while engaged in their debt settlement services.
“Defendants are a collection of interrelated entities, limited liability companies, corporations, partnerships, and/or individuals or a joint enterprise and/or venture that collectively compromise a debt adjustment services operation targeting financially troubled consumers and extracting exorbitant fees for worthless services from individuals least able to afford it.” – Source
The suit alleges the Defendants made claims they could get consumers out of debt in 12 to 36 months, lower bills, negotiate a settlement, and charged a front-loaded fee. Otherwise what is quickly becoming known as “The Usual.”
- On January 10, 2007, Plaintiff entered into an agreement entitled “Debt Settlement Services Agreement” with both Fresh Start Solutions, LLC and Fresh Start Advisors, LLC for the purpose of debt settlement.
- The Agreement requires their clients to pay a “non-refundable retainer fee of $795.00 or 6% of CLIENTs total unsecured debt whichever is greater” at the time of execution of the Agreement.
- Defendants additionally charge their clients a “monthly program fee of $29” each month that the client remains in the program.
- Defendants claim that they will arrange to settle their clients’ debts for 53% or less of what the clients owe their creditors. If Defendants are successful in settling a debt for less than 53% of what is owed, Defendants are to receive a “performance-based fee” of the difference between 53% and the actual amount paid to the creditor.
- Defendants debited Plaintiffs checking account in the amount of $717.70 each month beginning on January 20, 2007 and on the zoth day of the month until March 20, 2008, for a total of 15 payments equaling $10,765.50.
- Each month that Defendants withdrew monies from Plaintiffs account, Defendants kept a portion of the funds for themselves and deposited a portion of the fees in an account with Rocky Mountain Bank and Trust.
- In approximately April 2008, Plaintiff terminated her participation in Defendants’ DEP.
- After Plaintiff terminated her participation in the DEP, she demanded a refund of the fees that she had paid to Defendants, but none of the funds paid by Plaintiff were returned to her by Defendants.
- On June 13, 2008, Plaintiff demanded a refund of her funds held by Rocky Mountain Bank.
- Plaintiff received a check dated July 7, 2008 in the amount of $5,624.94 drawn on a Global Client Solutions, LLC account held at Rocky Mountain Bank.
- Thus, Defendants kept $5,140.56 of Plaintiffs money and never paid one dime to any of Plaintiffs creditors.
This case is a great example of why I keep telling debt relief companies of all kinds to refund client fees in full. This stuff can come back years later to haunt you if you try to be clever or play fast and lose with refunds.
This suit was filed by a gang of attorneys.
George Richard DiGiorgio ([email protected])
F. Jerome Tapley ([email protected])
Jon C. Conlin ([email protected])
Cory, Watson, Crowder & Degaris, PC
2131 Magnolia Avenue
Birmingham, AL 35205
James Hurt ([email protected])
Hurt, Stolz & Cromwell, LLC
650 Oglethorpe Avenue
Athens, GA 30606
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