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New Jersey judge freezes credit companies' assets

LEGAL NEWSLINE

Saturday, November 23, 2024

New Jersey judge freezes credit companies' assets

Anne Milgram (D)

NEWARK, N.J. (Legal Newsline) -- New Jersey Superior Court Judge Thomas Cavanagh has issued a temporary restraining order against five credit counseling companies.

The restraining order was issued after the Division of Consumer Affairs and Attorney General Anne Milgram filed a lawsuit that claimed the companies required payment in advance during consultations and then failed to provide consumers with credit counseling, repair or bankruptcy services.

The companies named in the suit are United Credit Adjusters, Bankruptcy Masters Corp., United Counseling Association, Inc. and Credit Bureau Controls Corp.

While the defendants claim otherwise, the suit alleges consumers' credit scores were not raised nor was negative information eliminated from credit reports.

Judge Cavanagh temporarily enjoined and restrained the defendants from:

- Removing, selling, encumbering, transferring or engaging in any act of disposition of any assets . . . including but not limited to all deposits or any monies paid by consumers . . . except as reasonable and necessary for day-to-day business expenses;

- Destroying, concealing, altering, transferring, disposing or removing in any manner any books or records . . . that directly or indirectly relate to the advertisement and/or sale of credit repair, credit counseling, debt adjuster and bankruptcy filing services;

- Failing to make and/or keep any books or records related to these services; and

- Engaging in or doing any acts or practices in violation of the New Jersey Consumer Fraud Act and the Regulations Governing General Advertising.

"We're pleased the court has granted our request for temporary restraints. We want consumers protected as our investigation into the alleged violations committed by these defendants moves forward," the Democratic attorney general said.

The court has scheduled a hearing on the state's request for a preliminary injunction for December 9.

"We firmly believe that consumers were defrauded by these companies. We're taking action to safeguard consumers and bring these defendants into compliance with our consumer protection laws and regulations," said David Szuchman, Consumer Affairs director.

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