VALPARAISO, Ind. (Legal Newsline) - Indiana Attorney General Greg Zoeller filed a lawsuit Wednesday against two out-of-state credit service and foreclosure consultant companies that allegedly operated illegally in Indiana.
Zoeller alleged that Hoosiers in 13 Indiana counties signed contracts with the Fla.-based Community One Law Center, as well as National Law Partners, based in Florida and California. The lawsuit alleges that both companies collected money up front and failed to provide customer refunds after services were not provided. The companies are separate entities but both allegedly worked interchangeably on files and shared employees.
"Many desperate consumers with bad credit or near foreclosure see offers of this kind as their last chance to improve their financial situation," Zoeller said. "Despite believable sales pitches, services were not rendered and promised refunds were not returned. It's important that Hoosiers are aware of these scams and seek foreclosure counseling services from legitimate, non-profit sources."
Community One and National allegedly violated Indiana's consumer protection laws by not registering $25,000 surety bonds with Zoeller's office. Indiana law requires foreclosure consultants and service organizations to register bonds prior to performing any services, including the upfront collection of money. The bond acts as an insurance policy for consumers in case a company fails to perform.
Zoeller alleged that deposit amounts illegally collected from Hoosiers range from $499 to $2,699.
The lawsuit alleges that both organizations violated the Deceptive Consumer Sales Act, the Credit Services Organization Act, the Home Loan Practices Act and the Mortgage Rescue Protection Act. Community One and National also allegedly failed to obtain a certificate of authority from the Indiana Secretary of State's office to conduct business in Indiana.
The state is seeking restitution for 15 victims, civil penalties and attorneys' fees.