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NEWARK
- Attorney General Anne Milgram and the
Division of Consumer Affairs have filed
suit against United Credit Adjusters, a
credit repair and credit counseling company
that allegedly failed to provide such services
to consumers despite its advertising claims.
The
state’s five-count complaint, filed
in State Superior Court in Monmouth County,
also names as defendants the following companies
that are believed to be connected and/or
related to United Credit Adjusters: Bankruptcy
Masters Corp.; United Counseling Association,
Inc.; and Credit Bureau Controls Corp.
The
state alleges that the defendants required
payment in advance during initial consultations
and then, after receiving payment, failed
to provide consumers with credit counseling,
credit repair and/or bankruptcy services.
Contrary to defendants’ representations
and advertisements, consumers’ credit
scores were not raised nor was negative
information eliminated from credit reports.
“United
Credit Adjusters and these defendants offered
false hope to consumers who found themselves
in dire financial situations. They misrepresented
the services they would provide and pocketed
money from consumers for essentially doing
nothing related to credit repair and credit
counseling,” Attorney General Anne
Milgram said.
The
state alleges that the defendants violated
New Jersey’s Consumer Fraud Act, Debt
Adjustment and Credit Counseling Act and
Advertising Regulations in the operation
of their businesses. The State Division
of Consumer Affairs has received approximately
118 consumer complaints either directly
or from the Better Business Bureau (“BBB”)
as well as the Monmouth County Consumer
Affairs Office, which began the investigation
of United Credit Adjusters. United Credit
Adjusters, which has maintained business
and mailing addresses in Lakewood, Howell
and North Manasquan, is believed to be in
operation even though its New Jersey corporate
status was revoked in May 2008 for failure
to file annual reports.
“Through
their ads and other statements, the defendants
attempted to convince consumers that they
would improve their financial situation.
This situation underscores the common warning
we stress to consumers - if it sounds too
good to be true, it probably is,’”
said David Szuchman, Consumer Affairs Director.
In
its complaint, the state alleges the defendants:
- Accepted
payment from consumers and then failed
to provide consumers with all or most
of the contracted-for credit repair, credit
counseling and/or bankruptcy services;
- Misrepresented
to consumers that they would remove all
negative information from consumer credit
reports, when such was not the case;
- Misrepresented
to consumers that they would remove late
payments, reported collection accounts,
judgments and/or charge offs from consumer
credit reports, when such was not the
case;
- Required
payment from consumers prior to performing
any credit repair
and/or credit counseling services;
- Failed
to provide consumers contracting for credit
repair and/or credit counseling services
with a written contract which clearly
describes all of the terms and conditions
and includes a conspicuous statement as
to the consumer’s cancellation rights;
- Misrepresented
to consumers that filing for bankruptcy
would have no or minimal effect on their
credit history and that within a short
period of time their credit report would
be “a clean slate” and they
could “start over;”
- Advised
consumers who contacted the defendants
seeking credit repair and/or credit counseling
services that they should file for bankruptcy;
- United
Credit Adjusters and United Counseling
held themselves out as “debt adjusters”
when, as for-profit companies in the state,
it was against the law to do so;
- United
Credit Adjusters misrepresented in its
advertisements that it is a member of
the BBB and used the BBB logo, even after
its membership was revoked in June 2007;
-
Failed to inform consumers that credit
reporting bureaus are only required to
remove either inaccurate, incorrect negative
information or accurate negative information
that is older than 7 years; and
- Failed
to respond to consumer complaints, inquiries
and/or requests for refunds in a timely
manner or at all.
Deputy
Attorneys General Jeffrey Koziar and Cathleen
O’Donnell of the Consumer Fraud Prosecution
Section are representing the state in this
action.
Consumers
who wish to file complaints can contact
the Division of Consumer Affairs online
at www.njconsumeraffairs.gov
or by telephone at 1-800-242-5846
(toll-free within New Jersey) and 973-504-6200
from all locations.
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