State Files Suit Against United Credit Adjusters
and Related Companies
NEWARK - Attorney General Anne Milgram and the Division of Consumer Affairs have filed suit against United Credit Adjusters, a credit repair and credit counseling company that allegedly failed to provide such services to consumers despite its advertising claims.
The state's five-count complaint, filed in State Superior Court in Monmouth County, also names as defendants the following companies that are believed to be connected and/or related to United Credit Adjusters: Bankruptcy Masters Corp.; United Counseling Association, Inc.; and Credit Bureau Controls Corp.
The state alleges that the defendants required payment in advance during initial consultations and then, after receiving payment, failed to provide consumers with credit counseling, credit repair and/or bankruptcy services. Contrary to defendants' representations and advertisements, consumers' credit scores were not raised nor was negative information eliminated from credit reports.
“United Credit Adjusters and these defendants offered false hope to consumers who found themselves in dire financial situations. They misrepresented the services they would provide and pocketed money from consumers for essentially doing nothing related to credit repair and credit counseling,” Attorney General Anne Milgram said.
The state alleges that the defendants violated New Jersey's Consumer Fraud Act, Debt Adjustment and Credit Counseling Act and Advertising Regulations in the operation of their businesses. The State Division of Consumer Affairs has received approximately 118 consumer complaints either directly or from the Better Business Bureau (“BBB”) as well as the Monmouth County Consumer Affairs Office, which began the investigation of United Credit Adjusters. United Credit Adjusters, which has maintained business and mailing addresses in Lakewood, Howell and North Manasquan, is believed to be in operation even though its New Jersey corporate status was revoked in May 2008 for failure to file annual reports.
“Through their ads and other statements, the defendants attempted to convince consumers that they would improve their financial situation. This situation underscores the common warning we stress to consumers - if it sounds too good to be true, it probably is,'” said David Szuchman, Consumer Affairs Director.
In its complaint, the state alleges the defendants:
Accepted payment from consumers and then failed to provide consumers with all or most of the contracted-for credit repair, credit counseling and/or bankruptcy services;
Misrepresented to consumers that they would remove all negative information from consumer credit reports, when such was not the case;
Misrepresented to consumers that they would remove late payments, reported collection accounts, judgments and/or charge offs from consumer credit reports, when such was not the case;
Required payment from consumers prior to performing any credit repair and/or credit counseling services;
Failed to provide consumers contracting for credit repair and/or credit counseling services with a written contract which clearly describes all of the terms and conditions and includes a conspicuous statement as to the consumer's cancellation rights;
Misrepresented to consumers that filing for bankruptcy would have no or minimal effect on their credit history and that within a short period of time their credit report would be “a clean slate” and they could “start over;”
Advised consumers who contacted the defendants seeking credit repair and/or credit counseling services that they should file for bankruptcy;
United Credit Adjusters and United Counseling held themselves out as “debt adjusters” when, as for-profit companies in the state, it was against the law to do so;
United Credit Adjusters misrepresented in its advertisements that it is a member of the BBB and used the BBB logo, even after its membership was revoked in June 2007;
Failed to inform consumers that credit reporting bureaus are only required to remove either inaccurate, incorrect negative information or accurate negative information that is older than 7 years; and
Failed to respond to consumer complaints, inquiries and/or requests for refunds in a timely manner or at all.
Deputy Attorneys General Jeffrey Koziar and Cathleen O'Donnell of the Consumer Fraud Prosecution Section are representing the state in this action.
Consumers who wish to file complaints can contact the Division of Consumer Affairs online at http://www.njconsumeraffairs.gov or by telephone at 1-800-242-5846 (toll-free within New Jersey) and 973-504-6200 from all locations.