Two Minnesota-based debt settlement companies agreed to cease operations in the state after regulators determined they were collecting illegal fees from customers and misrepresenting service offerings.
Minnesota Attorney General Keith Ellison announced a settlement between Financial Solutions Group and Accelerated Debt Settlement and his office, requiring the companies to provide full refunds to consumers charged illegal upfront fees.
“If done with integrity, helping people get out of debt is a noble pursuit,” Ellison said in a statement. “However, I will not tolerate bad actors who take advantage of Minnesotans, especially people who are already struggling financially. I am glad to be shutting two more fraudulent debt settlement companies down and putting money back in the pockets of Minnesotans.”
The settlement named related companies that allegedly misrepresented their services and pocketed significant fees from consumers in exchange for promises they could negotiate settlements of their debts on the consumers’ behalf.
It is illegal under the Fair Debt Collection Practices Act and Minnesota state law for debt settlement companies to charge consumers before providing service. Minnesota also requires debt settlement companies to be registered with the Minnesota Department of Commerce. Financial Solutions Group and Accelerated Debt Settlement were operating without registering as debt-settlement service providers.
The Minnesota AG office charged the companies with violating Minnesota’s Debt Services Settlement Act, Prevention of Consumer Fraud Act, and Uniform Deceptive Trade Practices Act.
The terms of the settlement required the companies to pay the state the full amount collected from Minnesota customers: $1,081,756.59. The Minnesota AG said he plans to use the money to provide full restitution to consumers and will contact impacted consumers entitled to refunds.