WBK Industry News - State Regulatory Developments

New York Settles with Debt Relief Company Again

A debt relief company recently entered into a proposed consent order with the New York Attorney General, agreeing to pay $3.6 million to settle allegations that the company violated a 2011 Assurance of Discontinuation (AOD).

The 2011 AOD required the company to make certain disclosures when advertising savings or debt reduction percentage rates to potential consumers.  Those requirements remain in place and certain requirements are clarified by the consent order.

The consent order will prohibit the company from directly or impliedly representing savings and debt reduction rates unless certain restrictions are complied with.  The restrictions include disclosing the percentage of customers who achieve advertised savings or debt reduction rates when it is less than the majority, disclosing when a “defined universe” of customers achieve the advertised savings or debt reduction rates, and, when advertising a range of savings or debt reduction, disclosing the percentage of customers achieving the high end of the range.  All such disclosures must be clear and conspicuous.

The debt relief company agreed to the consent order without admitting or denying the allegations made.  It agreed to pay $3.6 million to the state of New York, which will then distribute restitution to impacted consumers.