Sorrell settles with Debt Settlement America
MONTPELIER, Vt. (Legal Newsline) - A Dallas-based debt settlement company has agreed to a settlement with Vermont Attorney General William Sorrell that will see more than $120,000 paid to the State in refunds and payments.
Debt Settlement America, Inc., Sorrell claims, violated state law by engaging in debt adjustment without a license and failing to comply with the Vermont Consumer Fraud Act.
Sorrell alleges that Debt Settlement America was in violation of the Consumer Fraud Act by not following Vermont's three-day right to cancel requirements and through its failure to have prior proof to support online claims about results that consumers could expect to achieve. On its Web site, Debt Settlement America said that it would be able to reduce consumers' debts to "less than 50 cents on the dollar."
Twenty-five Vermont consumers entered into contracts with Debt Settlement America, which charged 10 percent-15 percent of the dollar amount of the debt placed with the company. A total of $69,000 was paid in fees by those consumers to Debt Settlement America.
Under the settlement, Debt Settlement America will pay all its Vermont customers full refunds as well as pay $50,000 in civil penalties and costs to the state.
Additionally, any Vermont consumer sued by a creditor after signing with the company will be paid $2,000. Debt Settlement America will also offer to complete, without charge, negotiations with the creditors of its Vermont Customers.
This is Sorrell's ninth settlement with a debt settlement firm in the past year.