Florida AG Tags Five Debt Settlement Firms In Two Separate Lawsuits Alleging Deceptive Practices, Upfront Fee Ripoffs

From the Office of the Florida Attorney General:

• Attorney General Bill McCollum [...] announced his office has filed two lawsuits on behalf of Florida consumers against five debt settlement-related companies.(1) According to the Attorney General’s lawsuits, the businesses promised consumers they could pay off their debts for a fraction of the amount owed, but instead collected large up-front fees and left customers with little or no money to pay creditors. “These victims were hit with a one-two punch: they paid substantial up-front fees for services not provided as promised, then ended up with increased debt, ruined credit, lawsuits, bankruptcy and more,” said Attorney General McCollum. [...] Both lawsuits petition the court for full victim restitution, injunctive relief, and civil penalties for each violation of Florida’s Deceptive and Unfair Trade Practices Act.

For the entire press release, see Attorney General McCollum Targets Debt Relief Industry Abuses (Two lawsuits filed alleging excessive fees and conduct defrauding consumers and damaging credit).

(1) One of the lawsuits was filed against Texas-based CSA-Credit Solutions of America, Inc., a self-proclaimed debt settlement industry leader. The lawsuit alleges that CSA unlawfully charges significant advance fees before completing or, in many instances, commencing performance of its debt settlement services. For the lawsuit, see State of Florida v. CSA-Credit Solutions of America, Inc.

The second lawsuit filed names Clearwater-based ADA of Tampa Bay, Inc., which does business as American Debt Arbitration. The lawsuit also names the company’s principal Glenn P. Stewart, as well as Arizona-based entities Nationwide Asset Services, Inc., Service Star, LLC, and Universal Debt Reduction, LLC. The lawsuit alleges the defendants promise to help consumers pay off their debts at significant savings, but fail to adequately disclose the true cost of their services. Also allegedly withheld from consumers is the fact that the companies collect at least the first three months’ of payments as fees, in violation of Florida law, before the consumer can start accumulating any funds for settlement and before any services begin. For the lawsuit, see State of Florida v. Nationwide Asset Services, Inc., et al.