A nationwide debt settlement company that has already created a multi-state trail of state-filed lawsuits alleging scams has agreed to pay Maine some $150,000 and to stop doing new business in the state.
Texas-based Credit Solutions of America took advance payments from consumers in Maine who were trying to get out debt, and then failed to solve the customers’ problem with creditors as promised.
“Despite CSA’s claims that consumers who enrolled in their program would be debt free in 36 months, the truth is that debt relief is not a quick fix,” said Maine Attorney General William J. Schneider.
Starting in about 2003, the company promised Maine consumers that it would eliminate 40 to 60 percent of the total amount they owed. Customers had to initially pay the company an advance fee of up to 15 percent of their total debt.
However, of the 561 enrollees in Maine who paid the advance fees, said Schneider’s office, a mere six settled their debts at the company’s minimum promised discount of 40 percent.
“More than 98 percent of Maine consumers who dealt with this company did not get the promised results,” said Will Lund, Superintendent of the state’s Bureau of Consumer Credit Protection.
Now, CSA has agreed to not engage new customers in Maine, to no longer take any advance fees from in-state customers it’s already enrolled, and to pay $150,000 for the state’s cost of the investigation and litigation.
The Better Business Bureau in Dallas has issued an alert about CSA and it gave the company an “F” grade on its business-review site. There are more than 700 complaints logged with that office against Credit Solutions of America.
According to the BBB, the attorney general in Texas filed suit against the company in May 2009 for unfair and deceptive practices. New York and Missouri followed with their own suits based on similar charges in May and June of 2009.
Maine officials encourage consumers to contact them if they think they’ve lost money in the now-settled case.
For more information about how to verify that a debt-relief service is in good standing, check out these materials at the Federal Trade Commission’s website.