McGraw settles with three debt relief companies
CHARLESTON, W.Va. (Legal Newsline) - West Virginia Attorney General Darrell McGraw has announced three settlements with debt relief companies that will provide a total of $214,000 in refunds to 226 West Virginia consumers.
All three companies - Clear Financial Solutions of Orlando, Florida, and owner Chris Rubini; Financial Freedom of America Inc. of Dallas, Texas; and Financial Solutions Legal Center of West Palm Beach, Florida - also agreed discontinue providing debt relief services in West Virginia in the future.
Clear Financial Solutions was alleged to have promised consumers that, for a one-time fee ranging from $1,000-$2,000, it would reduce interest on their credit card debt through a "debt negotiation" service.
Financial Freedom of America and Financial Solutions Legal Center were alleged to have used a "debt settlement" service that advised consumers to stop making payments to credit card banks to try to accumulate savings.
That savings would then be used to negotiate a lump sum settlement by the debt settlement company that would be less than the amount owed.
"Consumers who seek help with financial problems on the Internet or from high pressure telemarketers are more likely to find trouble rather than a solution to their problems. My office urges consumers burdened with debt to contact local credit counseling agencies or West Virginia lawyers who are ethically obligated to advise consumers on all available options, including bankruptcy," McGraw said.
"Despite my office's concerns about their practices, I commend these companies for cooperating with our investigation and for taking the necessary steps to resolve our concerns," McGraw added.