Andrew Cuomo (D)
NEW YORK (Legal Newsline) -In an effort to clean up a debt settlement industry, fraught with alleged fraudulent companies, New York Attorney General Andrew Cuomo has begun a nationwide investigation.
On Friday, Cuomo subpoenaed 14 debt settlement companies and one law firm in connection with the probe.
Those under investigation are: American Debt Foundation, Inc.; American Financial Service; Consumer Debt Solutions; Credit Answers, LLC; Debt Remedy Solutions, LLC; Debt Settlement America; Debt Settlement USA; Debtmerica Relief; DMB Financial, LLC; Freedom Debt Relief; New Era Debt Solutions; New Horizons Debt Relief Inc.; Preferred Financial Services, Inc.; U.S. Financial Management Inc. (d.b.a. My Debt Negotiation); and the Allegro Law Firm.
The subpoenas include requests designed to uncover the companies' fee structures, how many people have benefited from the companies' services, and what kind of relief the companies are actually providing.
"Today, millions of hardworking Americans are finding themselves imprisoned by debt. In response, a rogue industry has stepped in, offering consumers false hope, charging tremendous fees, and leaving them in a worse financial situation," the Democratic AG said. "Our mission is clear: to hold unscrupulous businesses accountable; to rein in a renegade industry; and to ensure that people are not victimized when faced with financial hardship."
The attorney general has made this a prime mission of his office. On April 14, 2009, the attorney general arrested the owner of Long Island-based American Legal Process for allegedly providing "sewer service" to thousands of New Yorkers owing debt.
According to the Attorney General's criminal complaint and civil suit, this company failed to properly notify individuals that they faced debt-related lawsuits. As a result, individuals would unknowingly default and have judgments entered against them, without the chance to defend themselves.
Cuomo is also investigating Nationwide Asset Services, Inc., based in Phoenix, Arizona, and Credit Solutions of America, Inc., based in Addison, Texas.