DOB: 1st American Law Center - CD-Repay-CP

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IN THE MATTER OF:

1ST AMERICAN LAW CENTER, INC.

    ("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 (“Department”), 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 May 23, 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 May 24, 2011, the Notice was sent by registered mail, return receipt requested, to Respondent’s agent (Registered Mail No. RB028020115US);
 
WHEREAS, on June 6, 2011, a copy of the Notice was sent by registered mail, return receipt requested, to Respondent’s agent at a different address (Registered Mail No. RB028020685US);
 
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, issue an order for repayment of fees or charges to the Connecticut residents identified in Exhibit A to the Notice and may order that the maximum civil penalty of Ninety Thousand Dollars ($90,000) be imposed upon Respondent;
 
WHEREAS, on June 6, 2011, the Notice sent on May 24, 2011, was returned to the Department marked “Returned to Sender – Refused”;
 
WHEREAS, on June 17, 2011, the copy of the Notice sent on June 6, 2011, was returned to the Department marked “Returned to Sender – Moved, Left No Address”;
 
WHEREAS, Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that “[t]he notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending”;
 
WHEREAS, Section 36a-50(a)(1) of the Connecticut General Statutes provides, in pertinent part, that “[t]he notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending”;
 
WHEREAS, Respondent failed to request a hearing within the prescribed time period;
 
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Respondent’s engaging 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 services on and after October 1, 2009, with at least eight (8) 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 eight (8) violations of Section 36a-671b(b) of the Connecticut General Statutes.  Such violations form 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 such excessive fees to the Connecticut residents identified in Exhibit A of the Notice, and, among other things, 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 June 23, 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 7, 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 and 2 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 fees by the Connecticut residents identified in Exhibit A of the Notice to be excessive, after taking into consideration the fact that (1) the Schedule of Maximum Fees issued by the Commissioner only permits a fee of $500 to be collected upon successful completion of the debt negotiation services contract; (2) the debt negotiation services contracts were not successfully completed; and (3) the Connecticut residents received no benefit from such contracts, 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.
1st American Law Center, Inc., CEASE AND DESIST from violating Sections 36a-671(b) and 36a-671b(b) of the Connecticut General Statutes;
2.
A CIVIL PENALTY of Ninety Thousand Dollars ($90,000) be imposed against 1st American Law Center, Inc., 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.
1st American Law Center, Inc., REPAY FEES by cashier’s check, certified check or money order to the Connecticut residents and in the respective amounts identified in Exhibit A attached hereto, no later than ten (10) days from the date this Order is mailed and shall provide to Marlene M. Mannix, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or marlene.mannix@ct.gov evidence of such repayment; and
4.
This Order shall become effective when mailed.
 
 

Dated at Hartford, Connecticut
this 18th day of July 2011.                        ________/s/_________
                                                            Howard F. Pitkin
                                                            Banking Commissioner



This Order was sent by certified mail,
return receipt requested, to
Respondent on July 19, 2011.

1st American Law Center, Inc.               Certified Mail No. 70101870000136193014
Attention:  Dan Gregory Chandler, Agent
615 Mission Avenue
Oceanside, CA 92054

1st American Law Center, Inc.               Certified Mail No. 70101870000136193021
c/o Dan Chandler, Stat. Agent
2101 El Camino Real, Suite 204
Oceanside, California 92054


Administrative Orders and Settlements