A Maryland company accused of illegally offering and selling debt management services has settled a suit with Massachusetts and 19 other states.
Under the settlement, AscendOne Corp., and its subsidiaries Amerix Corp., CareOne Services Inc., FreedomPoint Financial Corp. and 3C Inc. (collectively, "AscendOne"), and Bernaldo Dancel, the owner of the companies, will also pay $4.5 million, $290,000 of which will go to Massachusetts.
The judgment provides preventive measures to ensure the defendants’ future compliance with the law, according to a statement.
According to a complaint filed by Massachusetts Attorney General Martha Coakley, AscendOne misled consumers by representing that the debt management services it offered would be performed by a nonprofit credit counseling agency when, in fact, AscendOne performed the services.
The complaint further alleges that AscendOne charged consumers, but provided little or no benefit to them.
"It is unconscionable for any business to prey upon vulnerable consumers," said Coakley. "Debt management service providers must abide by the law if they wish to operate in Massachusetts. Deceptive and misleading business practices will not be tolerated."
In Massachusetts, any business that offers or performs debt management services must be a nonprofit organization authorized by the commonwealth and must comply with the law. Attorneys may also provide these types of services. Debt management services are provided when a credit counseling agency receives monthly payments from consumers for the purpose of distributing the funds to consumers’ creditors at a monthly rate negotiated by the credit counseling agency, through what is known as a debt management plan.
The consent judgment executed by Suffolk Superior Court Judge Bonnie MacLeod-Mancuso prohibits AscendOne and their owner from offering, selling or performing debt management services unless they comply with all state law requirements. The settlement also prohibits AscendOne and Dancel from misrepresenting that their services were being performed by a nonprofit, the purpose of the fees they charged, and the impact of entering into a debt management plan upon a consumers’ credit history.
Furthermore, the settlement prohibits AscendOne and Dancel from enrolling consumers into debt management plans unless they first determine that the consumer can afford the plan and provide the consumer with meaningful credit counsel.
Other states involved in the settlement include: Arkansas, Arizona, California, Delaware, District of Columbia, Idaho, Indiana, Maryland, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Washington and West Virginia.
