Debt settlement company hit with $200,000 in penalties for defrauding NY customers

Debt settlement company loses NY lawsuit

BUFFALO, N.Y. — An Arizona-based debt settlement company accused in a lawsuit of preying on people who can’t pay their bills has been ordered to pay nearly $200,000 in penalties for defrauding customers in New York state.

New York Attorney General Andrew Cuomo launched a nationwide probe last spring into a “renegade industry” of debt settlement businesses. He accused Nationwide Asset Services Inc. of Phoenix, and CSA-Credit Solutions of America Inc. of Richardson, Texas, of failing to deliver on promises to consumers seeking to renegotiate personal debts and pay off credit cards.

In a ruling disclosed Thursday, Judge Patrick Nemoyer in Buffalo assessed a $198,100 penalty against Nationwide Asset Services for defrauding 1,981 consumers. He also barred the company from doing business in the state unless it provides a $500,000 performance bond to protect customers.

While the company promised it could reduce outstanding debts by 25 to 40 percent, Cuomo argued that less than 1 percent of its 2,000 New York customers saved that much.

“This company made promises to people who were searching for financial help and trying to turn their lives around,” Cuomo said in a statement. “But the promises never came true and, in many cases, New Yorkers were left in worse condition than when they started.”

Nationwide Asset Services is still evaluating whether to appeal the decision, attorney Mark Walling said.

The lawsuit against CSA-Credit Solutions has not yet been resolved.