- Office of Attorney General Maura Healey
Media Contact for AG Healey Secures $1 Million in First-Of-Its-Kind Resolution With Debt Settlement Company
BOSTON — Following an investigation into a Beverly-based debt settlement company accused of harming financially-distressed consumers in Massachusetts, Attorney General Maura Healey announced today a first-of-its-kind settlement that secures $1 million in relief and requires extensive changes to the company's business practices.
The consent judgment with DMB Financial, LLC, and its chief operating officer, Daniel Kwiatek, entered on Monday in Suffolk Superior Court, resolves allegations by the AG’s Office that DMB charged inflated and premature fees, enrolled consumers who were unable to benefit from its program, and failed to disclose the harms consumers may experience after enrolling in its program—including being sued by creditors and damaging their credit.
“DMB’s business practices were the epitome of unfair and deceptive – preying on low-income consumers desperate for debt relief, charging them illegal fees, and leaving them with more debt, damaged credit, and sued by debt collectors,” AG Healey. “This settlement is first-of-its-kind against a debt settlement company in Massachusetts and its terms will lay out a roadmap for addressing misconduct in this industry going forward. We are pleased to secure the funds needed to give money back to consumers who were harmed by DMB’s illegal operations.”
DMB, which operates in Massachusetts and more than a dozen other states, enrolls vulnerable consumers—including people who are unemployed or underemployed, elderly, sick, disabled, or living on a limited or fixed income—in debt settlement programs that they are often unable to afford or complete. DMB claims to have served 30,000 consumers nationwide.
The AG’s Office filed a lawsuit against DMB in 2018, later amended in 2019, after an investigation by the AG’s Office revealed that DMB engaged in numerous unfair debt settlement practices, including overcharging consumers, grossly misrepresenting the value of its services, and failing to make critical disclosures to consumers about the harms they may suffer due to enrolling in DMB’s program.
According to the AG’s Office, DMB charged consumers significant fees for negotiating settlements with their creditors, which it typically collected before consumers had achieved any debt forgiveness. DMB also directed consumers to stop paying their debts and to stop communicating with creditors, and to instead make payments into a dedicated “savings” account administered by payment processor Global Client Solutions. Many consumers who DMB enrolled in its program were unable to complete the program and did not emerge “debt free,” as DMB advertised. Instead, the AG’s Office alleged that, DMB knowingly and regularly enrolled consumers in unaffordable programs that charged substantial fees and left them in worse financial condition than before. The AG’s Office also alleged that DMB engaged in the unauthorized practice of law by continuing to represent consumers after they were sued in relation to an enrolled debt.
Under the terms of today’s consent judgement, DMB is required to pay $1 million to the Commonwealth, and will implement significant business practice changes, including prohibiting DMB from:
- Requesting and receiving inflated or premature fees, in violation of Federal Trade Commission regulations;
- Failing to refund a proportionate amount of any settlement fee collected by DMB if the consumer does not complete making payments on that settlement;
- Making deceptive or unsubstantiated claims about DMB’s ability to settle debts;
- Failing to make relevant disclosures on its website and in any materials to prospective enrollees in DMB’s program; and
- Advising, representing or negotiating on behalf of a consumer who is sued for nonpayment of a debt, and failing to provide consumers who are sued with a list of resources.
Today’s settlement also requires DMB to submit annual reports to the AG’s Office to ensure compliance with the terms.
Consumers eligible for relief under today’s settlement will be contacted by the AG’s Office. Consumers with questions about settlement eligibility should contact AG Healey’s consumer hotline at 617-727-8400.
Handling this case are Assistant Attorneys General Yael Shavit and Mercy Cover of AG Healey’s Consumer Protection Division and Paralegals Keren Yi and Breana Beaudreault, with assistance from Investigator Ciara Tran of AG Healey's Civil Investigations Division.