Attorney General Jim Petro has filed a civil suit alleging violations of the Ohio Consumer Sales Practices Act, Ohio Home Solicitation Sales Act and the Ohio Debt Adjusting Act by two Florida-based companies offering “debt termination” services and the Ohio-based independent contractors who sold those services to Ohio residents.
“There is no such thing as instant debt termination, and this company set out to take advantage of Ohioans by offering a service that doesn’t exist and cannot be guaranteed,” Petro said. “Our investigation found that more than 45 people in the Youngstown area paid an average of $5,000 each to get their debt terminated, and now they are worse off than they started.”
Ohio’s lawsuit is part of a Federal Trade Commission led sweep. Ohio joins seven other state and federal agencies in unveiling “Project Credit Despair,” a law enforcement sweep targeting scammers offering bogus credit-repair services.
The independent contractors, David Graves and Linda-Bearer Graves of Boardman, operated under the business names of Business Group Alternatives and Bearer, Graves and Associates. Petro’s complaint alleges they told Ohio consumers that two Florida-based companies, New Leaf Associates, LLC and Quantum Business Consulting, would completely eliminate their credit card and student loan debt by using a legal “administrative process” as an alternative to bankruptcy and promised that debt could be eliminated in 90-120 days.
However, consumers complained to the Attorney General’s Office that they did not receive credit debt termination, nor did they receive a refund for services not provided.
The Attorney General’s investigation also revealed that consumers were not informed of their three-day right to cancel contracts that were signed in the consumers’ homes and that in some cases the independent contractors advised consumers to “max out” their credit cards, leaving them in a worse state when the debt was not eliminated as promised.
In his lawsuit, Petro is asking that consumers receive full refunds of the money they invested into this scheme, that civil penalties of $25,000 per consumer law violation and $10,000 per violation of the Debt Adjusting Statute be ordered, and that an injunction be ordered to prohibit the companies from further violating Ohio laws.
The suit was filed in Mahoning County Common Pleas Court.
Consumers can file complaints with Attorney General Jim Petro’s office online at www.ag.state.oh.us or by calling 1-800-282-0515.