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Attorney General McGraw Reaches Settlement with
Four Debt Relief Companies for 366 Consumers
Attorney General Darrell McGraw announced settlement
agreements with four debt relief companies that brought
to an end their controversial practice of "debt settlement"
services in West Virginia. The companies, Debt Relief
of America, L.P., of Dallas, Texas; Fidelity Debt
Consultants, Inc. of Clearwater, Florida; David Huffman
d/b/a Freedom Group of San Diego, California; and
New Horizons Debt Relief of Aliso Viejo, California,
agreed to permanently discontinue debt settlement
and any other kinds of debt relief services in West
Virginia. They also agreed to refund all fees and
charges that they collected which, collectively, will
result in refunds of approximately $517,000 in fees
and charges for 366 West Virginia consumers.
Debt Relief of America and Fidelity Debt Consultants
had the bulk of the accounts in West Virginia, servicing
all but a few of the affected consumers. In contrast,
New Horizons and Freedom Group serviced only three
consumers combined and accounted for $4,285.86 and
$7,000, respectively, of the $517,000 owed to West
Virginia consumers.
Debt settlement is a plan or strategy offered for
a fee in which consumers are advised or expected to
stop making payments to credit card banks or other
unsecured creditors. The consumers are directed to
make monthly payments to the debt settlement company
or into a separate fund or account for an unspecified
time until the debt settlement company determines
that sufficient funds have been accumulated. The company
then attempts to negotiate lump sum settlements of
the consumers’ accounts for less than the balance
owed.
For the rest of this article please feel free to visit
www.wvago.gov.
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