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Vermont Court Fines Debt Settlement Company, Awards Refunds, In Consumer Fraud Case

CONTACT: Elliot Burg, Assistant Attorney General, (802) 828-5507

April 2, 2012

Washington Superior Judge Michael S. Kupersmith has fined a Texas debt settlement company and its owner/CEO $2.07 million in civil penalties and awarded full refunds to 207 Vermonters in a consumer fraud lawsuit filed by Vermont Attorney General William H. Sorrell. The defendants in the case are CSA-Credit Solutions of America, LLC, based in Dallas, and its founder, owner and chief executive officer, Doug Van Arsdale.

In July 2010, the Attorney General’s Office sued both CSA and Van Arsdale, alleging that in offering to negotiate reductions in the principal amount of Vermont consumers’ debts, they used unsubstantiated “results” claims (such as “Reduce your debt 60% in seconds!”) to advertise their debt settlement services; failed to properly notify consumers of their right to cancel their contract with the company; and did business in Vermont without first obtaining the required license from the Department of Banking, Insurance, Securities and Health Care Administration. It is unknown whether CSA is still in operation.

In an Order dated March 21, 2012, the court:

  • Barred the defendants from conducting future debt settlement or any similar business in Vermont, or, in the alternative, required them have prior reasonable and specific factual substantiation for any results claims and to comply with the state’s right-to-cancel and debt adjuster licensing requirements.
  • Ordered the defendants to provide prompt and full refunds to all 207 consumers who paid fees to the company, totaling approximately $350,000.
  • Ordered the defendants to pay civil penalties in the amount of $2.07 million, or the statutory maximum of $10,000 per consumer, based on the “substantial and widespread” nature of the violations of law.
  • Ordered the defendants to reimburse the State’s attorney’s fees and costs in the amount of $91,059.
  • Attorney General Sorrell characterized the court’s action as just and appropriate, in light of the serious consumer fraud involved. “As Judge Kupersmith noted, the decision provides both a sanction for the defendants’ conduct and a deterrent to similar conduct by them and others in the future,” said General Sorrell.

      Website consulting provided by The National Association of Attorneys General.