Missouri Attorney General Sues Texas Debt Relief Company
Missouri Attorney General Chris Koster has taken legal action against a Texas debt settlement company, filing a lawsuit against Credit Solutions of America for illegally charging consumers for debt relief services the company never provided, his office announced in a press release last week (âAttorney General Koster Files Suit to Stop Company for Falsely Promising Credit-Card Debt Help,â June 2, 2009).
Credit Solutions of America, based in Richardson, Texas, advertised that it could cut consumersâ credit card payments in half, reduce their other monthly bills, and get them out of debt within three years, Koster says. But although the company collected hefty fees from consumers with the promise of delivering those debt reduction results, Koster charges that Credit Solutions of America never provided the advertised debt relief services, leaving its customers in a worse financial situation than before.
According to the Attorney General, Credit Solutions of America charged its customers fees that amounted to about 15 percent of their total debt, collecting those fees through an initial upfront payment and then through subsequent installment payments that it took directly from customersâ bank accounts.
The state of Missouri prohibits companies from collecting fees for credit services prior to the services being performed in full. Moreover, says Koster, the company wasnât even legally registered to do business in the state.
âCredit Solutions of America promised real relief to consumers who were in financial straits because of high credit card debt,â Koster said. âWe will continue to aggressively pursue the unacceptable business practices of these companies that offer false promises and deliver only harm.â
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