Debt Settlement Company Ordered to Pay $200,000 for Defrauding New York State Customers

During a time when most people are desperate to pay off those high-interest rate credit card balances, it can be tempting to call up a debt settlement company. They often promise a quick fix: by paying them a fee, they agree to negotiate much lower settlement amounts with your creditors. Indeed, for many people debt settlement seems like the answer to fix all of their financial woes and a way to avoid bankruptcy. However, a recent lawsuit against a debt settlement company in New York state might make you think twice before “signing on the dotted line”, so to speak.

In a ruling on Thursday, the Arizona-based Nationwide Asset Services was ordered to pay $200,000 for defrauding 1,981 customers in New York State. Furthermore, the company was also barred from conducting further business in New York, unless they provide a $500,000 performance bond to protect their customers.

In their advertisements, Nationwide Asset Services promised to help customers pay off outstanding debts by as much as 25 to 40 percent. However, less than 1% of the 2,000 New York State residents actually saved that much. Currently, there is another lawsuit pending against CSA-Credit Solutions, a Richardson, Texas debt-consolidation company. That case has yet to be resolved.