Back in 2010 Credit Solutions of America was challenged by the State of Vermont over its practices and activities. CSA decided to fight the charges and in the meantime Doug Van Arsdale, CEO, got involved with a new venture, SaveMore.com, that has turned into a swirling mess.
Yesterday the Vermont Attorney General announced the case against Van Arsdale and CSA has finally ended. But it ended with Vermont has fining the Texas debt settlement company and its owner/CEO $2.07 million in civil penalties and awarded full refunds to 207 Vermonters in a consumer fraud lawsuit filed by Vermont Attorney General William H. Sorrell.
In July 2010, the Attorney General’s Office sued both CSA and Van Arsdale, alleging that in offering to negotiate reductions in the principal amount of Vermont consumers’ debts, they used unsubstantiated “results” claims (such as “Reduce your debt 60% in seconds!”) to advertise their debt settlement services; failed to properly notify consumers of their right to cancel their contract with the company; and did business in Vermont without first obtaining the required license from the Department of Banking, Insurance, Securities and Health Care Administration.
The Order dated March 21 states:
- Barred the defendants from conducting future debt settlement or any similar business in Vermont, or, in the alternative, required them have prior reasonable and specific factual substantiation for any results claims and to comply with the state’s right-to-cancel and debt adjuster licensing requirements.
- Ordered the defendants to provide prompt and full refunds to all 207 consumers who paid fees to the company, totaling approximately $350,000.
- Ordered the defendants to pay civil penalties in the amount of $2.07 million, or the statutory maximum of $10,000 per consumer, based on the “substantial and widespread” nature of the violations of law.
- Ordered the defendants to reimburse the State’s attorney’s fees and costs in the amount of $91,059.
In an outcome that is slightly different than that in the Freedom Financial Processing case where a court determined only the results of consumers who completed the program were relevant in making sales claims, the Vermont court differed.
The Vermont court said that CSA and Van Arsdale could “not advertise the savings or other results they can achieve unless they first possess reasonable and specific factual substantiation that those results actually represent the typical outcome for their customers, using a calculation based on all debts enrolled, the amounts due at the time of enrollment, and the inclusion of service fees.” – Source
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