InfoBytes Blog
Massachusetts announces consent judgment against debt-collection company
On August 31, the Massachusetts attorney general announced a “first-of-its-kind” consent judgment against a Massachusetts-based debt-settlement company and its chief operating officer for allegedly violating the Massachusetts Consumer Protection Act, among other things. The consent judgment settled a lawsuit in which the AG alleged that the company charged inflated and premature fees, knowingly and regularly enrolled consumers who were not able to benefit from its program, and failed to communicate the harms that consumers could encounter after enrolling in its program. According to the AG, the company “directed consumers to stop paying their debts and to stop communicating with creditors, and to instead make payments into a dedicated ‘savings’ account administered by [a] payment processor.” The AG also alleged the company “engaged in the unauthorized practice of law by continuing to represent consumers after they were sued in relation to an enrolled debt.” Under the terms of the AG’s consent order, the company is required to pay $1 million to the Commonwealth.
As previously covered by InfoBytes, in May, the CFPB announced a settlement with the same company for allegedly violating the Telemarketing Sales Rule and the Consumer Financial Protection Act.