December 14, 2013

Colorado AG settles with debt-settlement company over alleged abuses

The defunct Texas-based debt settlement company CreditAnswers has paid $225,000 to resolve allegations that it was operating illegally in Colorado.

In February 2012, the state Attorney General's office accused CreditAnswers of providing debt-management services without complying with the state's consumer protection and debt-settlement laws and said the company financially harmed 615 Coloradans.

The company denied the allegations.

On Thursday, Attorney General John Suthers said his office has entered an agreement CreditAnswers and its CEO William Loughborough that will keep the company from ever providing debt-management services in Colorado again. The company also agreed to pay $225,000 for consumer restitution, reimbursement of costs and attorneys' fees, and for educational purposes.

According to filings in the case, CreditAnswers was a Colorado-registered debt-settlement services provider from April 2009 through July 2011. But the company's business practices violated various provisions of the Colorado Uniform Debt-Management Services act by failing to provide required consumer disclosures and cancellation notices, in addition to other violations, the attorney general's office said.

"When the legislature decided to regulate the debt-settlement industry beginning in 2008, it was trying to address some of the worst abuses in the industry, including lack of clear disclosures and exorbitant fees," Suthers said in a statement. "This settlement with CreditAnswers continues our efforts to hold accountable violators of that law."