ATLANTA — Joe Doyle, administrator of the Governor’s Office of Consumer Affairs, announced that the agency has entered into a settlement with Debt Relief USA, Inc., a debt adjustment company, over allegations that it violated Georgia’s Debt Adjustment Act.
The company agreed to refund all fees it has received from its Georgia clients, a total of $527,205.55, reimburse OCA for administrative expenses in the amount of $40,000, and to cease doing business in Georgia until it changes its business practices to comply with Georgia law.
OCA alleges that Debt Relief USA, Inc. violated each of the three major provisions of Georgia’s Debt Adjustment Act:
Debt adjustment companies cannot legally charge Georgia consumers more than 7.5 percent of the amount the consumer deposits with the debt adjustment company each month for distribution to his or her creditors. Debt Relief USA, Inc. allegedly charged debtors “administrative fees”, “monthly maintenance fees”, and “negotiation fees”, none of which was part of the amount distributed to creditors each month.
1) Georgia law also requires that all funds that debt adjustment companies accept from consumers (minus the authorized fees described above) must be provided to the consumer’s creditors within 30 days of receipt from the consumer, another alleged violation.
2) Finally, debt adjustment companies must maintain a separate trust account for customer funds and specific insurance coverage to protect consumers. Copies of these audits and insurance policies must be filed annually with the Governor's Office of Consumer Affairs. Debt Relief USA, Inc. failed to comply with these provisions as well.
“OCA is committed to ensuring that consumers receive the benefit of the protections that are contained in Georgia’s Debt Adjustment Act,” said Doyle. “This office will aggressively pursue companies that do not comply with the statute.”
The Governor’s Office of Consumer Affairs offers the following suggestions to consumers who are looking for a reputable debt adjustment company:
• Contact the National Foundation for Credit Counseling at 1-800-388-2227/www.nfcc.org
• Check with the Better Business Bureau —www.bbb.org — to see if there are any unresolved complaints against the company
• Contact the Governor’s Office of Consumer Affairs at (404) 651-8600 or 800-869-1123 to ensure that the company has filed the necessary audit and insurance documents, as required by Georgia law
• Make sure the debt adjust company provides all promises, terms and agreements in writing.
If you learn of a debt adjustment company that is in violation of Georgia law, contact the Governor’s Office of Consumer Affairs at (404) 651-8600 or 800-869-1123.