West Virginia sues Irving debt settlement company

by PegNews wire

IRVING — The State of West Virginia announced today that it has filed suit against Able Debt Settlement, Inc. of Irving, Texas, seeking injunctive relief and restitution for consumers who paid for debt settlement but only received ruined credit and debt collection calls.

Able Debt Settlement, formerly of Dallas, Texas, claims to settle consumers' debts. According to the lawsuit, however, many consumers find out that the company doesn't settle debts and then refuses to refund the very large fees it charges.

West Virginia Attorney General Darrell McGraw’s Consumer Protection Division started an investigation of Able Debt Settlement in 2007 and obtained an injunction against the company when it refused to comply with the investigation. Able tried to stop McGraw by twice asking the West Virginia Supreme Court to intervene. The Court refused Able Debt Settlement's petitions, allowing McGraw to continue the investigation.

Although debt settlement services are unrestricted in some states, West Virginia’s law regarding debt settlement only permits for-profit companies to charge a fee of two percent of the payments made by consumers. In his complaint, McGraw is alleging that Able Debt Settlement was charging more than the two percent fee allowed by state law and not settling debts.

"Debt settlement companies that simply sign consumers up, take their money and then fail to negotiate debts on behalf of consumers will not be tolerated in West Virginia," McGraw said. "Consumers in desperate financial situations should consult an attorney or non-profit credit counseling agency before paying any money to an unknown debt settlement company."

Source: Consumer Affairs