CHARLOTTE, NC (WBTV) -
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 Friday.
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.
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