It appears that Attorney General Andrew Cuomo has filed lawsuits against two debt settlement companies. The stated reasons for the suits include false advertisement and fraudulent business practices.
Texas-based CSA-Credit Solutions of America and Arizona-based Nationwide Asset Services, along with their respective affiliates ServiceStar LLP and Universal Debt Reduction LLC are those prominently listed. Additionally, FGL Clearwater Inc, a marketing unit d/b/a American Debt Arbitration of Florida has also been named.
Cuomo, who is leading an investigation of the entire debt-settlement industry, has made allegations that both Nationwide Asset Services and Credit Solutions of America have been actively engaging in deceptive business practices and false advertisement regarding their debt settlement services. Recently, the Attorney General subpoenaed fourteen debt settlement companies as well as one law firm as part of his ongoing investigations.
In statements made by Cuomo, the Attorney General said, “These companies are taking advantage of people in New York and throughout the entire country who are facing tremendous economic hardship.”
He went on to say, “These companies claim to be the light at the end of the tunnel, but time after time they have shown that they only add to the burdens of Americans dealing with debt.”
Details of the investigation highlighted the fact that almost 18,000 New York residents became customers of Credit Solutions of America when it was established in January of 2003 up until September of 2008.
It was also reported that the company promised 60% reduction in debt reduction for its clients, yet the average savings was barely 1%. Worse still, despite promises of intervention or representation made by CSA, many customers have been facing legal suits and harassment by creditors. The total fees accumulated by CSA from New York clients are about $17 million.
Similar information was released about Nationwide Asset Services who had a roster approximately 2,000 New York customers from January 2005 through May 2008. Though offering more modest reduction percentages, somewhere between 25 to 40%, the company averaged the same miniscule 1% of realized savings among its clientele.
As part of his investigation and in an effort to get information out there about debt settlement, Cuomo has launched a Web site called www.NYDebtHelp.com. The sit provides information about consumer rights, offers those who have become victims of debt settlement companies quick access to the Attorney General’s office to file complaints.
Tags: debt settlement lawsuit, Universal Debt Reduction LLC, debt settlement, Nationwide Asset Services, Andrew Cuomo, NY Debt Help, ServiceStar LLP
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