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Debt Adjustor Sanctioned for Violating Licensing and Consumer Laws

CONTACT: Justin Kobler, Assistant Attorney General, (802) 828-5620

May 20, 2013

American Debt Counseling, Inc., a Florida company that provides debt reduction programs and credit counseling to consumers, will refund almost $4,000 in fees to Vermont consumers and pay the State of Vermont $10,000 to settle claims that the company violated Vermont consumer protection laws. The company admitted to violating Vermont’s Debt Adjuster’s Act by unlawfully engaging in the business of debt adjustment without a license, and the Vermont Consumer Protection Act by failing to provide adequate written and verbal notice of consumers’ right to cancel their contracts. Vermont Attorney General William H. Sorrell described the settlement as the most recent in an ongoing effort to protect Vermonters in financial distress. Before engaging companies to help settle their debts, consumers should review these tips.

American Debt Counseling entered into contracts with seven Vermont consumers, and took over making payments to their creditors. Some of these payments failed to meet the minimum monthly payments, and as a result, some Vermont customers incurred late fees and calls from creditors. Under the terms of the settlement, American Debt Counseling will, among other remedies: refund all fees collected from Vermont customers; pay any late fees incurred by a customer during the term of the contract; pay $2,000 to any Vermont customer who was sued by a creditor while on the company’s “watch”; and promptly complete, without charge, credit counseling and debt payment programs for its Vermont customers, at the customer’s option.

Consumers who have sent money to debt adjusters who are not listed as licensed with the Vermont Department of Financial Regulation can file a complaint with the Attorney General’s Consumer Assistance Program, or mail a complaint to “Consumer Assistance Program,” 146 University Place, Burlington, VT 05405.

  Website consulting provided by The National Association of Attorneys General.