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Debt Adjuster Sanctioned For Violating Licensing And Consumer Laws

CONTACT: Elliot Burg, Assistant Attorney General, (802) 828-2153

March 9, 2009 - Boston Debt Solutions, LLC, a Framingham, Massachusetts, company that negotiates debt settlements for consumers, will refund over $9,000 in fees to Vermont consumers and pay the State of Vermont $20,000 to settle claims that the company violated Vermont’s Debt Adjuster’s Act by unlawfully engaging in the business of debt adjustment without a license and violated the Vermont Consumer Fraud Act. Vermont Attorney General William H. Sorrell described the settlement as the first in an ongoing effort to protect Vermonters in financial distress. “In economic hard times,” he said, “we must ensure that laws designed to protect consumers from financial loss are complied with.”

Boston Debt Solutions violated the Consumer Fraud Act by failing to provide written and verbal notice of consumers’ right to cancel their contracts and imposing prepayment charges for cancellation; failing to adequately disclose the risks (including the risk of being sued) associated with turning accounts over to the company and not making payments to creditors; and charging fees to its customers in advance of rendering services to them.

Boston Debt Solutions charged its customers a retainer fee, a “performance-based fee” in the event a debt was settled for less than 55 percent of the amount due, and $250 if the consumer cancelled the service. The company entered into contracts with four Vermont consumers, some of whom were subsequently sued by creditors.

Under the terms of the settlement, Boston Debt Solutions will, among other remedies, refund all fees collected from its Vermont customers; pay $2,000 to any Vermont customer who was sued by a creditor while on the company’s “watch”; promptly complete, without charge, negotiations with all listed creditors of each of its Vermont customers, at the customer’s option; and make all reasonable efforts to settle the amount due each creditor at 55 percent and document those efforts in writing.

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