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Debt Settlement Company Settles Consumer Claims

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

July 23, 2009 - Clear Your Debt, LLC, an Austin, Texas, company that negotiates debt settlements for consumers, will refund over $20,000 in fees to Vermonters and pay the State of Vermont $40,000 to settle claims that the company violated state law by engaging in the business of debt adjustment without a license, and failed to comply with the Vermont Consumer Fraud Act. Commenting on the case, the fourth this year involving a debt settlement firm, Vermont Attorney General William H. Sorrell said his office will “continue to take action against companies that offer to reduce consumers’ debts but don’t themselves comply with the law.”

According to the Attorney General, Clear Your Debt violated the Consumer Fraud Act by not following the state’s three-day right to cancel requirements for telephonic transactions, and by failing to have prior proof to support online claims that it could reduce consumers’ credit card debt “by up to sixty percent” and “eliminate … outstanding credit card debt in as little as 24 months.” The company, which entered into contracts with 11 Vermont consumers, charges its customers a fee of up to 15 percent of the amount of the debts placed for settlement.

Under the terms of the Attorney General’s settlement , in addition to refunds to consumers and civil penalties to the state, Clear Your Debt will pay $2,000 to any Vermonter who was sued by a creditor after signing up with the company, and will offer to complete, without charge, negotiations with the creditors of its Vermont customers.

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