WASHINGTON (5/31/13)--A Florida debt-relief company is the subject of a complaint filed Thursday by the Consumer Financial Protection Bureau that charges the operation with misleading consumers across the country and charging "illegal fees" for their services.
The bureau plans to submit a proposed consent order that, if approved by the court, would halt the operations of the American Debt Settlement Solutions Inc. (ADSS), prevent the company and its owner, Michael DiPanni, from providing debt-relief services in the future, and impose a $15,000 civil penalty fine.
"Today we are taking action to halt a debt-relief company we believe has been preying on financially vulnerable consumers," said CFPB Director Richard Cordray. "Consumers struggling to pay off a debt are among the most at risk and deserve better. We will continue to crack down on this type of harmful behavior."
Credit Union National Association Deputy General Counsel Mary Dunn commended the agency's action. "We are pleased that the agency is utilizing its many talents to target what appears to be abusive practices. This is the real value of the agency," she said.
The CFPB said in a release that its investigation found that ADSS and DiPanni "routinely charged consumers illegal upfront fees for debt-relief services that rarely, if ever, materialized." The CFPB alleges the company charged approximately $500,000 in fees to hundreds of consumers in multiple states. The proposed consent order would award a judgment against the company of approximately $500,000, which would be suspended based on the company's inability to pay. (Use the resource link to read further allegations against the company and its owner.)
Earlier this month, the CFPB filed a complaint against two debt-relief providers, Mission Settlement Agency and Premier Consultant Group LLC, which would be made to halt their current practices, repay impacted customers and give up allegedly ill-gotten gains.
"These wolves in sheep's clothing take money from consumers who are already struggling to pay their bills, falsely promising them help while really making their problems worse," Cordray said at the time.