New York AG Files Suit Against Two Out-Of-State Debt Settlement Businesses; Accused Of Pocketing Fees, Failing To Fulfill Promises

From the Office of the New York Attorney General:

• Attorney General Andrew M. Cuomo [...] announced a new development in his nationwide investigation into the debt settlement industry, filing suit against two debt settlement companies for fraudulent business practices and false advertising. Cuomo filed suit against CSA-Credit Solutions of America, Inc. (“CSA”),(1) based in Richardson, Texas, which is one of the largest debt settlement companies in the country. He has also filed suit against Nationwide Asset Services, Inc. (“NAS”),(2) based in Phoenix, Arizona, along with its affiliates - ServiceStar LLP and Universal Debt Reduction, LLC - and its marketer, FGL Clearwater, Inc. d/b/a American Debt Arbitration, based in Florida.

For more, see Attorney General Cuomo Sues Debt Settlement Companies For Deceiving And Harming Consumers (Cuomo Files Suit against Credit Solutions of America, One of the Nation’s Largest Debt Settlement Companies, and Nationwide Asset Services for Fraud and Deceptive Advertising; Launches Website - www.NYDebtHelp.com - that Explains Consumer Rights and Outlines the Attorney General’s Investigation).

(1) According to the NY AG, approximately 18,000 New Yorkers signed up as customers of Credit Solutions of America between its inception in January 2003 and September 2008. CSA promised a sixty percent reduction in its consumers’ outstanding debt, but an average of one percent of consumers received that savings. Many consumers have faced continued harassment and lawsuits by their creditors, despite CSA’s promise to intervene on their behalf. CSA has collected approximately $17 million in fees from New York-based consumers, AG Cuomo said.

(2) According to the NY AG, approximately 2,000 New Yorkers became customers of Nationwide Asset Services, Inc. between January 2005 and May 2008. NAS promised a twenty-five to forty percent reduction in its consumers’ outstanding debt, but only one-third of one percent of consumers received that savings. Customers suffered continued harassment and lawsuits by creditors and had their credit ratings destroyed, AG Cuomo said.