A local debt settlement company that has been the subject of over 1,600 complaints to the BBB serving Dallas and Northeast Texas in the last 36 months has been charged by the Texas Attorney General’s office with defrauding customers. On March 26, 2009, the Texas Attorney General filed suit against Credit Solutions of America, Inc., alleging that the company misled consumers in its offer to eliminate consumers’ unsecured debts – such as credit card accounts – in as little as three years.
According to the lawsuit, Credit Solutions of America failed to negotiate settlements with creditors for most accounts entered into its program. The Attorney General’s office states that, “Further, when CSA did negotiate settlements with creditors, its clients did not always receive the 60 percent reduction they were promised.”
The lawsuit charges that because the company requires customers to stop making payments to their creditors, many customers faced late fees, additional interest, increased collections attempts, and even lawsuits by their creditors.
Credit Solutions of America is not a BBB Accredited Business, and has a BBB rating of F. The rating of F is due to:
• BBB concerns with the industry in which this business operates;
• Number of complaints filed against business;
• Failure to respond to complaints filed against business;
• Number of complaints filed against business that were not resolved; and
• Government action against business.
Complaints to the BBB are concerning dissatisfaction with the company’s service and misrepresentation of the results of the debt negotiation program. Specifically, customers complain that paying the company fee and following the debt negotiation program does not reduce debt as stated by company representatives.
As a result of the program, customers complain, they have an increase in debt, due to late fees or additional interest, and negative credit reporting.
The business responds to complaints by offering refunds or by referring to the client services agreement for explanation. Although most complaints are closed as resolved, the company has failed to correct the underlying reason for the complaints. To see the full BBB Reliability Report on the company, click here.
The Texas Attorney General’s case is pending. The state is seeking an injunction that would prevent the business from continuing to unlawfully promise services which it does not deliver.
In addition to the Texas lawsuit, Credit Solutions of America entered into a Consent Order in Idaho, following charges by the Idaho Department of Finance that the company was providing credit counseling services without a state-issued license.
The Texas Attorney General’s office advises: “Debtors should carefully research a debt reduction firm before entering into a contract or signing any documents. Options available to struggling debtors include credit counseling, debt management, debt settlement or bankruptcy. Texans who need additional information, believe they have been harmed by a debt-settlement company’s unlawful conduct or wish to file a complaint may contact the OAG at (800) 252-8011 or do so online at www.texasattorneygeneral.gov.”
To check out a business with the BBB or to file a complaint, start at www.dallas.bbb.org. For more information on the Texas action, see the Attorney General's news release.