States settle with AscendOne

Keith Loria Nov. 4, 2010, 2:58pm


SALEM, Ore. (Legal Newsline) - Oregon Attorney General John Kroger has announced a $4.5 million multi-state settlement with a debt management service that allegedly misled consumers about its services.

The Maryland-based AscendOne Corporation and its wholly-owned subsidiaries -- Amerix, CareOne Services, Inc., FreedomPoint Financial Corporation, and 3C Inc. -- as well as owner Bernaldo Dancel, will pay $4.5 million to 20 states and the District of Columbia. Oregon will receive $169,400 of that settlement.

The settlement stems from what is known as a debt management plan, which is when a debt management company receives a monthly payment from a customer that is then distributed to creditors at a rate negotiated by the company.

AscendOne allegedly misled consumers by representing or causing the likelihood of confusion that its debt management services would be performed by non-profit credit counseling agencies. AscendOne performed the alleged services itself.

Some consumers of AscendOne, it is alleged, did not benefit from the plans into which they were enrolled. The company, according to the complaint filed against it, also offered, sold and/or performed debt management services without first obtaining a license or registration for such services in Oregon.

"Consumers who are struggling to manage their debt need help, not deceptive marketing of debt management plans," Keith Dubanevich, chief of staff and special counsel to Attorney General Kroger, said.

Under terms of the settlement, AscendOne and its owner are prohibited from offering, selling or performing debt management services unless it is in compliance with all state law requirements, including becoming licensed.

AscendOne is also prohibited from misrepresenting services as being performed by a non-profit, the purpose of fees charged and the impact entering into a debt management plan may have on a consumers' credit history.

Additionally, AscendOne is barred from enrolling consumers into debt management plans unless it first determines a consumer can afford the plan.

Other states involved in the settlement include Arizona, California, Delaware, Idaho, Indiana, Maryland, Massachusetts, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Washington and West Virginia.

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