Judge Fines Texas Debt Relief Firm $2.5 Million for Abuses in Vermont
A Texas debt settlement firm and its owner have been ordered to pay $2.5 million in civil penalties and customer refunds for deceptive and fraudulent business practices in Vermont.
The judgment by Washington Superior Judge Michael S. Kupersmith against Dallas-based CSA-Credit Solutions of America LLC and its owner and CEO Doug Van Arsdale is the result of a lawsuit brought against CSA and Van Arsdale by Vermont Attorney General William H. Sorrell in July 2010. The lawsuit alleged that the defendants used unsubstantiated and deceptive results claims â€” such as â€śReduce your debt 60% in seconds!â€ť â€” to advertise their debt settlement services to Vermont consumers, which they would purportedly use to negotiate customersâ€™ debts with creditors and convince creditors to allow customers to pay off those debts for less than what was owed. Additionally, the defendants allegedly â€śfailed to properly notify consumers of their right to cancel their contract with the company; and did business in Vermont without first obtaining the required license from the Department of Banking, Insurance, Securities and Health Care Administrationâ€ť (â€śVermont Court Fines Debt Settlement Company,â€ť Office of the Attorney General of Vermont press release, April 2, 2012).
However, according to the lawsuit, the debt settlement operation was a scam. In most cases, promised debt settlement services were not provided, even though the defendants charged Vermont victims up-front fees before negotiating with creditors. â€śThe company might take years to get around to settling a single debt for the person, but long before that would have collected all of its fees associated with all of the debts that had been enrolled by the consumer,â€ť said Assistant Attorney General Elliot Burg, who also noted that CSA has also been sued by the attorneys general of New York, Texas, Maine, Missouri, and Illinois (â€śDebt company ordered to repay Vermonters,â€ť The Barre-Montpelier Times Argus, April 2, 2012).
â€śIt’s an old adage at this point but when you see a promise online that seems like it’s just too good to be true,â€ť Burg said, â€śit is too good to be true.â€ť
Under terms of the order, the defendants must pay $2.07 million in civil penalties, $350,000 in full refunds to 207 customers, and pay $91,059 to reimburse attorneyâ€™s fees and costs. CSA and Van Arsdale are also barred from debt settlement, debt relief, and related businesses in Vermont unless they offer reasonable and factual substantiation for results claims and comply with the stateâ€™s right-to-cancel and debt adjuster licensing requirements.
Burg said that it was unclear if CSA was still in business but that the state would make every effort to collect the courtâ€™s judgment from the company and Van Arsdale.
Order: State of Vermont v. CSA-Credit Solutions of America LLC, et al. Filed March 21, 2012.
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