For Immediate Release - November 05, 2010

AG Coakley and 19 State AGs Reach Settlement Over For-Profit Sales of Debt Management Services

BOSTON - Massachusetts Attorney General Martha Coakley, along with Attorneys General of 19 other States and the District of Columbia, reached a settlement with Maryland-based AscendOne Corporation, and its subsidiaries Amerix Corporation, CareOne Services, Inc., FreedomPoint Financial Corporation and 3C, Inc. (collectively, "AscendOne"), and Bernaldo Dancel, the owner of the companies, to address the unlawful offer and sale of debt management services to Massachusetts consumers. The Consent Judgment provides preventive measures to ensure the defendants' future compliance with the law. Under the Consent Judgment, AscendOne will also pay $4.5 million, $290,000 of which will go to Massachusetts.

According to a complaint filed by AG Coakley yesterday in Suffolk Superior Court, AscendOne, a for-profit company, offered, sold and performed debt management services illegally. The complaint alleges that AscendOne misled consumers by representing that the debt management services it offered would be performed by a non-profit credit counseling agency when, in fact, AscendOne performed the services. The complaint further alleges that AscendOne charged consumers, but provided little or no benefit to them.

"It is unconscionable for any business to prey upon vulnerable consumers," said AG Coakley. "Debt management service providers must abide by the law if they wish to operate in Massachusetts. Deceptive and misleading business practices will not be tolerated."

In Massachusetts, any business that offers or performs debt management services must be a non-profit organization authorized by the Commonwealth and must comply with the law. Attorneys may also provide these types of services. Debt management services are provided when a credit counseling agency receives monthly payments from consumers for the purpose of distributing the funds to consumers' creditors at a monthly rate negotiated by the credit counseling agency, through what is known as a debt management plan.

The Consent Judgment executed by Suffolk Superior Court Judge Bonnie MacLeod-Mancuso prohibits AscendOne and their owner from offering, selling or performing debt management services unless they comply with all state law requirements. The settlement also prohibits AscendOne and Dancel from misrepresenting that their services were being performed by a non-profit, the purpose of the fees they charged, and the impact of entering into a debt management plan upon a consumers' credit history. Furthermore, the settlement prohibits AscendOne and Dancel from enrolling consumers into debt management plans unless they first determine that the consumer can afford the plan and provide the consumer with meaningful credit counsel.

Joining Massachusetts in today's settlement are the Attorneys General of Arkansas, Arizona, California, Delaware, District of Columbia, Idaho, Indiana, Maryland, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Washington and West Virginia.

Assistant Attorney General April English of AG Coakley's Consumer Protection Division handled this matter.