North Carolina Department of Justice
North Carolina Department of Justice
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Florida debt relief firm to repay consumers, AG Cooper announces

Release date: 12/21/2012

Case is first joint enforcement effort between states and CFPB

Raleigh: Consumers in North Carolina and other states who paid money to a Florida debt relief firm but got no meaningful help will get $100,000 in refunds under a court order, Attorney General Roy Cooper said today.
 
The case against Payday Loan Debt Solutions, Inc. (PLDS) and its president, Sanjeet Parvani, is the first joint effort between states and the Consumer Financial Protection Bureau (CFPB). Along with North Carolina, Hawaii, New Mexico, North Dakota and Wisconsin participated in the case.
 
“Companies that take your good money, promise debt relief, and then drive you deeper in the hole are breaking the law,” Cooper said. “By working with other states and federal consumer protection authorities, we’ve been able to put a stop to this illegal behavior and win money back for consumers.”
 
At the request of Cooper, the other states, and the CFPB, a federal district court in Miami ordered PLDS to provide $100,000 in refunds to consumers who were charged advance fees but received no debt-settlement services from PLDS by the time their accounts were closed.  The order also requires PLDS to pay a $5,000 penalty and prohibits the company from engaging in unlawful conduct in the future.

"Today's order will put money back in the pockets of consumers who were wrongfully charged for debt-relief services,"  said CFPB Director Richard Cordray.  "We are pleased to be working with our state partners on this important effort to protect consumers."
 
The investigation found evidence that PLDS routinely charged consumers upfront fees prior to settling the consumers’ debts, in violation of both state and federal laws.  Under North Carolina law, it’s illegal to charge an upfront fee for debt settlement help.  
 
Approximately 80 North Carolina consumers paid PLDS for debt relief, according to records uncovered in the course of the investigation.  Consumers who are eligible for a refund will be contacted.
 
To report a debt relief scam, contact Cooper’s Consumer Protection Division at 1-877-5-NO-SCAM, toll-free within North Carolina, or file a complaint online at www.ncdoj.gov. For legitimate help getting out of debt, find an accredited, non-profit credit counselor in your area by contacting the National Foundation for Credit Counseling at 1-800-388-2227 or www.nfcc.org.  



Media contact:  Noelle Talley (919) 716-6413