Debt Relief USA, a Texas-based debt settlement company accused of overcharging Georgia consumers who were seeking the company’s help to pay down their unsecured debts, has agreed to refund more than $500,000 in fees to 330 customers, reports The Atlanta Journal-Constitution (”Debt Relief USA Settles Case, Must Pay Customers,” March 19, 2009).

The debt adjustment company was found to have overcharged Georgia consumers for negotiating with creditors to reduce consumers’ monthly debt payments. For an inflated fee, Debt Relief USA customers made monthly payments directly to the debt adjustment company, who then in turn dispersed the money to the customers’ creditors.

Debt Relief USA violated the Georgia Debt Adjustment Act when it charged consumers administrative, monthly maintenance, and negotiation fees that exceeded the 7.5 percent the act allows debt adjustment companies to take from consumers’ monthly payments.

As required by the law, Debt Relief USA also failed to pay clients’ creditors within 30 days of receiving clients’ monthly payments and failed to maintain separate trust and insurance accounts for each customer – both of which must be audited annually.

Under the settlement, Debt Relief USA has agreed to cease doing business in Georgia until it reforms its business practices to comply with state law and to reimburse the state’s Governor’s Office of Consumer Affairs $40,000 for administrative expenses it incurred in reaching the settlement.

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