Government Sues to Stop Illegal Debt Relief Practices of Florida Company

The federal Consumer Financial Protection Bureau (CFPB) has filed a lawsuit seeking to stop the illegal practices of a Florida debt relief company.  The lawsuit, filed in a Florida federal court, targets American Debt Settlement Solutions, Inc. (ADSS) and its owner, Michael DiPanni.  They are accused of charging illegal up-front fees for debt relief services, which often did not provide any relief to consumers. They also made illegal misrepresentations to consumers.  These tactics then made the consumers fall further into debt.  The director of the CFPB described the company as “preying on financially vulnerable consumers”.  The company apparently charged about half a million dollars in fees to consumers in multiple states.  Recent changes to the law have made it illegal for most debt relief companies to charge up-front fees for their services. More information about this case can be found by clicking here.

Our consumer protection law firm has often been contacted by consumers who had hired a debt relief or debt consolidation company.  These companies turned out to be scammers, and often caused the consumer to be sued by credit card companies and debt collectors.  This is because most of those companies told the consumer to pay them, instead of their credit cards.  Then, those debt consolidation companies often pocketed a large portion of the money paid by the consumer, and at the same time stopped paying the consumer’s credit cards.  As a result, those consumers were sued by the credit card companies.  The consumers did not realize that their agreement with a debt relief company was not binding at all on their credit card companies; as a result, they were worse off with their debt relief company than they would have been if they had simply retained an attorney to defend them in the credit card lawsuits.  Don’t let this happen to you!