The State Said:
1. EFA is a Texas limited partnership with its principal place of business at 7668 Warren Parkway, Suite 325, Frisco, Texas.
2. CLA is a Maryland limited liability company having its principal place of business at 29 West Susquehanna Avenue, Suite 400, Towson, Maryland.
3. From at least February 2010 to April 2012, Respondents engaged in debt negotiation of unsecured debt on behalf of Connecticut residents. On at least five occasions, Connecticut residents contracted with CLA for debt negotiation services and authorized EFA to communicate and negotiate with creditors on their behalf. On behalf of at least 100 Connecticut residents who contracted with CLA and other persons, EFA received fees totaling in excess of $100,000 for debt negotiation services, including communicating with clients, mailing documents to clients and creditors, processing client payments, and negotiating settlements with creditors.
4. On or about August 2010, a Connecticut resident complained to the Commissioner concerning CLA. On or about February 2010, the Connecticut resident had placed four credit accounts with CLA for “negotiation of payment plan or lump sum settlement” and was instructed to mail his completed paperwork, including account statements and voided check, to EFA’s principal place of business. The Connecticut resident stated in his complaint that he was unaware that CLA would not be making monthly payments to his creditors and as a result, his credit had been tarnished.
5. The Connecticut resident identified in paragraph 4 above paid an initial consultation fee of $199 and from February to August 2010, had been making monthly payments of $265 to CLA, which included a monthly retainer fee of $140.52 and a monthly service fee of $85. Such fees are in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees established by the Commissioner on or about October 1, 2009 (“Schedule of Maximum Fees”). The Schedule of Maximum Fees provides, in pertinent part, that, “[a] debt negotiator of unsecured debt may charge the debtor a reasonable one-time initial or set-up fee in an amount not to exceed fifty dollars ($50). . . . A debt negotiator of unsecured debt may change a monthly service fee . . . . The total service fee charged to a debtor may not exceed forty dollars ($40) per month”.
6. At no time relevant hereto have Respondents been licensed to engage in debt negotiation in this state, nor do Respondents qualify for an exemption from such licensure.
The State has ordered EFA and CLA to immediately cease and desist serving consumers and has ordered the companies to make restitution. – Source
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