Koster testifies about debt settlement
JEFFERSON CITY, Mo. (Legal Newsline) - Companies and individuals who specialize in preying upon consumers who have credit card debt are a growing threat to Missourians, state Attorney General Chris Koster said Tuesday.
The attorney general testified before the Senate Commerce Committee, outlining his plan for targeting fraudulent businesses nationwide.
Koster said foreclosure consultants and debt settlement firms have been deceiving consumers into purchasing their services on the promise they will fix the consumers' credit, instead requiring thousands of dollars up front for useless fees.
"In the end, to the extent that these companies provide any service at all, debt settlement and mortgage modification companies often offer a servicethat leaves a consumer no better off than where the consumer started," he said.
Koster went on to testify between 2007-2008, the State had received a total of 25 complaints, but this year alone the number of complaints has tripled.
He said companies are sending out tens of thousands of direct mail pieces to lure in consumers to purchase debt settlement services.
Koster said a federal ban on up-front fees related to mortgage rescue and debt settlement is needed, along with limiting fees from lawyers, stopping false advertising by debt settlement companies and continuing to restrict advertising from reverse mortgage providers.
"I encourage your committee to consider bold and bright line enforcement measures, to make scammers using these fraudulent tactics think twice, and to give enforcement agencies, such as my own, the strongest tools possible to prosecute them," Koster said.