AG sues credit card debt settlement companies

TAMPA - The Florida Attorney General's office announced today they have filed two lawsuits against debt settlement companies that they say were using unfair and deceptive trade practices to rip off people with credit card debt.

The two companies they sued today are Credit Solutions of America and ADA Tampa Bay, a Clearwater-based company.

Investigators say CSA would set people up with savings accounts, supposedly to pay off their debt in one lump sum at a reduced balance.

But within the first three months of setting up the savings account, investigators say CSA withdrew 85 percent of the money for its own fees. In the meantime, the consumer would be left with little to no money for the actual debt, which would accumulate interest and fees in the meantime.

Attorney General Bill McCollum said they are investigating 140 complaints against CSA, but estimates there are thousands of Florida victims.

CSA provided this statement to FOX 13 News: "This shows a misunderstanding of the industry and of our company. When people become overwhelmed by credit card and other debts, they need help. We provide it," said CEO Doug Van Arsdale.

McCollum said ADA Tampa Bay is a telemarketing company that would call people, and also have them set up a savings account. They would also withdraw significant upfront fees.

"You weren't paying off any of your debt during this time," McCollum explained.

McCollum said that credit card debt is a big problem in Florida: he said Florida has the second highest default rate of any state in the country, and that the average family has more than $10,000 in debt.

McCollum said anyone who needs help should first try to work with their creditors, and if that doesn’t work, contact a credit counseling agency, or contact a lawyer.

To file a complaint with the Attorney General, call 1-866-NO-SCAM or file a complaint online at http://www.myfloridalegal.com/ .

For a list of U.S. Department of Justice approved credit counseling agencies, click here:
http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm

To find an attorney: Bay Area Legal Services: http://www.bals.org/