DOB: The Debt Answer - CD-Repay-CP

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IN THE MATTER OF:

THE DEBT ANSWER, LLC

    ("Respondent")

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ORDER TO CEASE AND DESIST

ORDER OF REPAYMENT OF FEES

AND

ORDER IMPOSING CIVIL PENALTY


I.  PRELIMINARY STATEMENT

WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Sections 36a-671 to 36a-671d, inclusive, of the Connecticut General Statutes contained in Part II of Chapter 669 of the Connecticut General Statutes, “Debt Adjusters and Debt Negotiation”;
 
WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an investigation of the activities of Respondent, pursuant to the authority granted by Section 36a-17(a) of the Connecticut General Statutes, to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
 
WHEREAS, on April 6, 2011, the Commissioner, acting pursuant to Sections 36a-671a(b), 36a-671a(c) 36a-52(b), 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, issued a Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (collectively “Notice”) against Respondent, which Notice is incorporated herein by reference;
 
WHEREAS, on April 8, 2011, the Notice was sent by registered mail, return receipt requested, to Respondent (Registered Mail No. RB028037836US), its agent (Registered Mail No. RB028037840US) and its attorney (Registered Mail No. RB028020124US);
 
WHEREAS, the Notice provided Respondent with the opportunity for a hearing, and stated that if a hearing was not requested within 14 days of its receipt, the Commissioner would issue an order that Respondent cease and desist from violating Sections 36a-671(b) and 36a-671b(b) of the Connecticut General Statutes, and may order that the maximum civil penalty of One Million Two Hundred Ten Thousand Dollars ($1,210,000) be imposed upon Respondent;
 
WHEREAS, on April 14, 2011, Respondent received the Notice and no request for a hearing has been received by the Commissioner;
  
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Respondent’s offering to engage in debt negotiation in this state without obtaining the required license constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Respondent’s engaging in debt negotiation in this state on and after October 1, 2009, with 116 debtors and collecting fees without obtaining the required license constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Respondent’s engaging in debt negotiation services on and after October 1, 2009, with at least 110 Connecticut residents and collecting fees under terms which did not comply with Section 36a-671b(b) of the Connecticut General Statutes and the schedule of maximum fees established by the Commissioner pursuant to said section, constitutes 110 violations of Section 36a-671b(b) of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, also in the Notice, the Commissioner found that the fees charged by Respondent for debt negotiation services were excessive and ordered, pursuant to Sections 36a-52(b) and 36a-671a(c) of the Connecticut General Statutes that, not later than 10 days from receipt of the Notice, Respondent provide repayment of $2,424.90 by cashier’s check, certified check or money order to the Connecticut resident identified in Exhibit A of the Notice, and provide evidence of such repayment to the Director of the Consumer Credit Division;
 
WHEREAS, no evidence of such repayment was provided to the Director of the Consumer Credit Division by April 24, 2011;
 
WHEREAS, Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that “[i]f the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person.  No such order shall be issued except in accordance with the provisions of chapter 54”;
 
WHEREAS, Section 36a-50(a)(2) of the Connecticut General Statutes provides, in pertinent part, that “[i]f such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person”;
 
WHEREAS, Section 36a-50(a)(3) of the Connecticut General Statutes provides, in pertinent part, that “[e]ach action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54”;
 
AND WHEREAS, Section 36a-1-31(a) of the Regulations of Connecticut State Agencies provides, in pertinent part, that “[w]hen a party fails to request a hearing within the time specified in the notice, the allegations against the party may be deemed admitted.  Without further proceedings or notice to the party, the commissioner shall issue a final decision in accordance with section 4-180 of the Connecticut General Statutes and section 36a-1-52 of the Regulations of Connecticut State Agencies”.


II.  FINDINGS OF FACT AND CONCLUSIONS OF LAW

1.
The Commissioner finds that the matters asserted, as set forth in paragraphs 1 through 10, inclusive, of Section II of the Notice, shall constitute findings of fact within the meaning of Section 4-180(c) of the Connecticut General Statutes, and that the conclusions, as set forth in paragraphs 1 through 3, inclusive, of Section III of the Notice, shall constitute conclusions of law within the meaning of Section 4-180(c) of the Connecticut General Statutes and Section 36a-1-52 of the Regulations of Connecticut State Agencies.
2.
The Commissioner finds that Respondent has engaged in acts or conduct which, pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes, forms the basis to issue an order to cease and desist against Respondent, and, pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes, forms the basis to impose a civil penalty upon Respondent.
3.
The Commissioner finds that the payment of $2,424.90 in fees by the Connecticut resident identified in Exhibit A of the Notice to be excessive, after taking into consideration the fact that (1) the maximum fee schedule issued by the Commissioner only permits fees to be collected upon successful completion of the debt negotiation services contract, (2) the debt negotiation services contract was not successfully completed, and (3) the Connecticut resident received no benefit from such contract, which forms the basis to order repayment of such fees pursuant to Section 36a-671a(c) of the Connecticut General Statutes.
4. The Commissioner finds that the Notice was given in compliance with Sections 36a-52(a), 36a-50(a) and 4-177 of the Connecticut General Statutes.


III.  ORDER

Having read the record, I HEREBY ORDER, pursuant to Sections 36a-671a(b), 36a-52(a) 36a-50(a) and 36a-671a(c) of the Connecticut General Statutes, that:

1.
The Debt Answer, LLC CEASE AND DESIST from violating Sections 36a-671(b) and 36a-671b(b) of the Connecticut General Statutes;
2.
A CIVIL PENALTY of One Million Two Hundred Ten Thousand Dollars ($1,210,000) be imposed against The Debt Answer, LLC, to be remitted to the Department of Banking by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than thirty (30) days from the date this Order is mailed;
3.
The Debt Answer, LLC REPAY FEES in the amount of Two Thousand Four Hundred Twenty-Four Dollars and 90/100 ($2,424.90) by cashier’s check, certified check or money order, to be remitted and made payable to the Connecticut resident identified in Exhibit A attached hereto, no later than ten (10) days from the date this Order is mailed; and
4.
This Order shall become effective when mailed.
 

Dated at Hartford, Connecticut
this 7th day of June 2011.                         ________/s/_________
                                                            Howard F. Pitkin
                                                            Banking Commissioner



This Order was sent by certified mail,
return receipt requested, to
Respondent on June 7, 2011.


The Debt Answer, LLC                  Certified Mail No. 70101870000136192888
Attention:  Lloyd Regner, Member
12655 N. Central Expressway, Suite 800
Dallas, Texas 75243

The Debt Answer, LLC                  Certified Mail No. 70101870000136192895
Attention:  Lloyd Regner, Agent
9330 Amberton Parkway, Suite 2322
Dallas, Texas 75243

The Debt Answer, LLC                  Certified Mail No. 70101870000136192901
Attention:  Robby H. Birnbaum, Esq.
Greenspoon Marder, P.A.
Trade Centre South, Suite 700
100 West Cypress Creek Road
Fort Lauderdale, Florida 33309


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