fbpx

Connecticut Forces Global Client Solutions to Make Sure Debt Settlement Companies Are Really Licensed

Global Client Solutions, one of the major escrow companies that handles funds for debt settlement clients, was charged with being an unlicensed money transmitter by the state of Connecticut and then entered into a consent order to resolve the issue. According to the records, on November 30, 2011 Global Client Solutions received a cease and desist letter from the state and a Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing.

The agreement strikes at the very heart of the the flow of money from Connecticut residents, through Global Client Solutions to debt settlement companies. With this charge and consent order Global Client Solutions is now tasked with making sure the debt settlement companies they provide services for are actually licensed in Connecticut. Something they should have been doing for every state all along.

You’ve certainly got to give a hat tip to Connecticut for being clever on this approach to clean up unlicensed debt settlement companies who serve Connecticut residents.

The allegations made by Connecticut were:

Global: (1) engaged in the business of money transmission in Connecticut without a license, in violation of Section 36a-597(a) of the Connecticut General Statutes; (2) engaged in the business of debt adjustment in Connecticut without a license, in violation of Section 36a-656(a) of the Connecticut General Statutes, as amended by Public Act 11-216; (3) failed to cooperate with the Commissioner, in violation of Section 36a-17(d) of the Connecticut General Statutes; (4) made a statement to the Commissioner which was, at the time and in the light of the circumstances under which it was made, false or misleading in a material respect, in violation of Section 36a-53a of the Connecticut General Statutes; and (5) made untrue statements of a material fact or omitted to a state material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, in violation of Section 36a-53b of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-53b of the Connecticut General Statutes, as amended by Public Act 11-216;

As a result of the above actions, Global Client Solutions agreed to enter into a consent agreement without admitting or denying any of the allegations. As part of that agreement, Global Client Solutions is to pay the State of Connecticut $150,000 as a civil penalty. Additionally, Global Client Solutions institute procedures to reasonably ensure that the debt negotiation companies with which it does business in Connecticut (“DNEGs”) are either duly licensed or exempt from debt negotiation licensing in Connecticut, including, but not limited to:

  • No later than the date this Consent Order is executed by Global, Global shall send a notice to all DNEGs advising them that as of May 16, 2012, Global will no longer process DNEG fee disbursements on behalf of Connecticut residents who have engaged such DNEG, unless, prior to May 16, 2012, such DNEG advises Global, in writing, that it is licensed or exempt from debt negotiation licensing in Connecticut;
  • No later than May 25, 2012, Global shall provide copies of all written responses received from such DNEGs pursuant to paragraph (3)(a) to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov;
  • Effective May 16, 2012, Global shall no longer process fee disbursements to a DNEG, unless such DNEG has advised Global, in writing, that it is licensed or exempt from debt negotiation licensing in Connecticut. In addition, Global shall cease processing fee disbursements to a DNEG if the Commissioner notifies Global that (1) such DNEG is not licensed in Connecticut, (2) the Commissioner has issued a final decision ordering such DNEG to cease and desist from violating Section 36a-671 of the Connecticut General Statutes, or (3) the Commissioner has issued an advisory opinion indicating such DNEG is not exempt;
  • Effective ninety (90) days after the date this Consent Order is executed by Global, Global shall cease receiving its monthly service fees from the disbursement account of any Connecticut resident who is no longer actively participating in a debt settlement program as a result of Global no longer processing fee disbursements to the DNEG, pursuant to paragraph (3)(c) above, and shall promptly return all monies held in such accounts on behalf of Connecticut residents;
  • Upon execution of this Consent Order by Global, Global shall no longer accept new agreements to establish disbursement accounts and process payments on behalf of Connecticut residents who have engaged a DNEG, unless prior to such acceptance, such DNEG has advised Global, in writing, that it is licensed or exempt from debt negotiation licensing in Connecticut; and
  • For a period of eighteen (18) months from the date this Consent Order is executed by Global, Global shall provide copies of all written responses received from DNEGs advising Global that the DNEG is licensed or exempt from debt negotiation licensing in Connecticut to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov. – Source

Global Client Solutions also agreed to waive all monthly fees for existing Connecticut residents for three months.


Damon Day - Pro Debt Coach

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.

Follow Me
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.
Steve Rhode
Follow Me
See also  How Do I Get Out of This Debt Program I Just Started? - Vivian

Comments are closed.