Colo. AG sues debt settlement company
DENVER (Legal Newsline) - Colorado Attorney General John Suthers announced on Monday that he has filed a consumer protection lawsuit against a Westminster-based debt settlement company and its principal for allegedly fraudulent debt management practices.
The administrative action names Prestige Financial Solutions and its principal, Amy Thompson of Westminster. The lawsuit, which was filed in the Office of Administrative Courts in Denver, alleges that Prestige Financial Solutions failed to comply with a series of disclosure requirements included in the Colorado Uniform Debt Management Services Act.
"In these difficult economic times, some Colorado consumers have turned to debt management providers for help," the lawsuit says.
"Debt management providers encourage consumers to default on their debts and then promise to assist the consumers by settling the consumers' debts for pennies on the dollar. But after paying thousands of dollars to a debt settlement provider, consumers often discover that the provider has done nothing - or very little - to improve the consumers' financial situation."
The alleged violations include not informing consumers of their right to cancel contracts without penalty and failing to refund fees consumers paid upon cancellation. Colorado law requires debt management companies to register with the state.
The lawsuit seeks to suspend or revoke Prestige's registration to provide Colorado-based debt management services and to issue a permanent injunction that enjoins the defendants from providing debt management services to Colorado residents that violate the DMSA's requirement and impose civil penalties on the defendants. In addition, the lawsuit seeks to award restitution to those affected by the alleged violations and to require the defendants to pay court expenses and attorneys fees.