Lisa Madigan (D)SPRINGFIELD, Ill. (Legal Newsline)-Illinois Attorney General Lisa Madigan is taking aim at unscrupulous debt settlement companies she says do little other than leave consumers deeper in the hole than they were before the firms.
The Democratic attorney general proposed legislation this week that would bar debt settlement companies from charging upfront fees for services. She also wants firms to be licensed and bonded in addition to allowing consumers the right to cancel their contracts.
In a statement, Madigan said the debt settlement industry is wrought with abuses and wreaks havoc on financially strapped consumers.
"With credit card debt at an all-time high, increasing numbers of families have become prime targets for debt settlement companies who lure consumers in with elaborate, deceptive promises to dramatically reduce consumers' debt," Madigan said. "Based on my office's lawsuits and investigations of this industry, we've learned that consumers seldom, if ever, see their debts settled and often end up owing more than the credit card debt they originally incurred."
Earlier this week, Madigan sued Dallas-based Credit Solutions of America, claiming the company accepted money from consumers but failed to negotiate lower debts on their consumers' behalf.
"It's time to put an end to these abusive, deceptive practices and enact comprehensive reforms that require these companies to earn the fees they charge," Madigan said.