Thursday, March 26, 2009

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Texas Attorney General Charges Debt Settlement Company With Unlawful Conduct

AUSTIN – Texas Attorney General Greg Abbott today charged Credit Solutions of America, Inc. (CSA) with conducting an unlawful scheme that defrauded Texans with financial problems. According to the state’s enforcement action, CSA purported to offer a debt settlement service that would eliminate its customers’ unsecured debts – such as credit card accounts – in as little as three years.

Despite CSA’s promises, a state investigation revealed that the defendant failed to negotiate settlements with creditors for most accounts entered into its program. Further, when CSA did negotiate settlements with creditors, its clients did not always receive the 60 percent reduction they were promised. The state’s enforcement action seeks an injunction against CSA that will prevent the defendant from continuing to unlawfully promise services which it does not deliver.

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Attorney General's lawsuit against Credit Solutions of America

According to the state’s enforcement action, CSA not only charged its customers for services that were not delivered, but because its debt settlement program requires customers to stop making payments to their creditors, many CSA customers could face unforeseen late fees, additional interest, increased collections attempts, and even lawsuits by their creditors.

The Office of the Attorney General has received 140 complaints against CSA in the past two years. Additionally, the Better Business Bureau, which gave CSA a “failing” rating, received over 1,600 complaints against the company in the past 36 months.

Debtors should carefully research a debt reduction firm before entering into a contract or signing any documents. Options available to struggling debtors include credit counseling, debt management, debt settlement or bankruptcy.

Texans who need additional information, believe they have been harmed by a debt-settlement company’s unlawful conduct or wish to file a complaint may contact the OAG at (800) 252-8011 or do so online at www.texasattorneygeneral.gov.