Colorado regulators resolved a case in which more than 600 state residents were financially harmed by a Texas-based debt settlement company operating illegally in Colorado.
The Consumer Protection Section of the Attorney Generals office has entered a stipulation and final agency order with the now-defunct CreditAnswers and its CEO William Loughborough. CreditAnswers agreed to pay the state $225,000 for consumer restitution, reimbursement of costs and attorneys fees, and for educational purposes.
"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," said Colorado Attorney General John Suthers. "This settlement with CreditAnswers continues our efforts to hold accountable violators of that law."
In February 2012, Suthers' office accused CreditAnswers of providing debt-management services without complying with the states consumer protection and debt settlement laws. Under the final agency order, CreditAnswers and Loughborough agreed to be permanently enjoined from providing debt management services to Colorado residents.
CreditAnswers from April 2009 through July 2011 was a Colorado-registered debt settlement services provider. Its 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 Colorado Attorney Generals Office registers and regulates debt management companies, including debt- settlement and credit counseling companies. A list of registered companies is available online. Consumers with complaints against a debt management company are encouraged to file complaints with the Consumer Credit Group.