DOB: CreditAnswers; CreditArbitrators - CO

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IN THE MATTER OF:

CREDITANSWERS, LLC
a/k/a DEBT MEDIATION INITIATIVE
   ("CreditAnswers, LLC")

CREDITARBITRATORS, LLC
   ("CreditArbitrators")

   (collectively "Respondents")

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CONSENT ORDER        

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, Respondents are Texas limited liability companies with a place of business at 6200 Tennyson Parkway, Suite 200, Plano, Texas;
 
WHEREAS, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, conducted an investigation pursuant to Section 36a-17(a) of the Connecticut General Statutes into the activities of Respondents to determine if they had violated, were violating or were about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
 
WHEREAS, as a result of such investigation, on May 27, 2011, the Commissioner, acting pursuant to Sections 36a-671a(b), 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, issued a 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 Respondents, which Notice is incorporated herein by reference;
 
WHEREAS, the Notice alleges that from approximately August 2010 to May 2011, CreditAnswers offered to engage in debt negotiation concerning unsecured debt in this state via various media without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes;
 
WHEREAS, the Notice also alleges that from approximately January 2011 to May 2011, CreditArbitrators offered to engage in debt negotiation concerning unsecured debt in this state via various media without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes;
 
WHEREAS, on May 27, 2011, the Notice was mailed to Respondents by registered mail, return receipt requested (Registered Mail Nos. RB028037748US and RB028037822US), and to Respondents’ agent by registered mail, return receipt requested (Registered Mail No. RB028020172US);
 
WHEREAS, Respondents and Respondents’ agent each received the Notice on June 6, 2011;
 
WHEREAS, on June 9, 2011, the Department received an Appearance and Request for Hearing from Respondents;
 
WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by consent order, unless precluded by law;
 
WHEREAS, the Commissioner and Respondents now desire to resolve the matters alleged in the Notice and set forth herein;
 
WHEREAS, Respondents voluntarily agree to consent to the entry of the sanctions described below without admitting or denying any allegation contained in the Notice and set forth herein and solely for the purpose of obviating the need for further formal administrative proceedings concerning the allegations contained herein;
 
WHEREAS, Respondents herein represent to the Commissioner that they have not offered to engage in debt negotiation activity in Connecticut following receipt of the Notice;
 
WHEREAS, after receipt of the Notice, Respondents promptly removed Connecticut from the drop down menu of states listed on each of their websites whereby consumers, upon completion of a form, could request additional information about Respondents’ debt negotiation services;
 
WHEREAS, Respondents agree that the Notice may be used in construing the terms of this Consent Order, and agree to the language of this Consent Order;
 
AND WHEREAS, Respondents, through their execution of this Consent Order, voluntarily agree to waive their procedural rights, including a right to a hearing as it pertains to the allegations contained in the Notice and set forth herein, and voluntarily waive their right to seek judicial review or otherwise challenge or contest the validity of this Consent Order.


CONSENT TO ENTRY OF SANCTIONS

WHEREAS, Respondents, through their execution of this Consent Order, consent to the Commissioner’s entry of a Consent Order imposing the following sanctions:

1. No later than the date this Consent Order is executed by Respondents, Respondents shall remit to the Department of Banking, by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut,” the sum of Four Thousand Dollars ($4,000) as a civil penalty;
2.
Respondents shall immediately cease and desist from engaging or offering to engage in unlicensed debt negotiation activity in Connecticut in violation of Section 36a-671(b) of the Connecticut General Statutes;
3. No later than the date this Consent Order is executed by Respondents, Respondents shall provide an affidavit to the Commissioner attesting to the fact that since October 1, 2009, Respondents have not engaged in debt negotiation in this state, as defined pursuant to Sections 36a-671(a)(1) and 36a-671(b) of the Connecticut General Statutes; and
4.
No later than the date this Consent Order is executed by Respondents, Respondents shall:  (1) implement enhanced internal controls designed to deter the offering of debt negotiation services to Connecticut residents by Respondents while unlicensed as debt negotiators in this state, including instructing employees and independent contractors that the offering of debt negotiation services through any medium to Connecticut residents is prohibited, and (2) provide evidence of the implementation of such internal controls to Marlene M. Mannix, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or marlene.mannix@ct.gov.
 

CONSENT ORDER

NOW THEREFORE, the Commissioner enters the following:

1. The Sanctions set forth above be and are hereby entered;
2.
Upon issuance of this Consent Order by the Commissioner, this matter will be resolved and the Commissioner will not take any future enforcement action against Respondents based upon the allegations contained herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Respondents based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representation made by Respondents and reflected herein is subsequently discovered to be untrue;
3.
This Consent Order shall become final when issued.
 

Issued at Hartford, Connecticut
this 19th day of October 2011.            ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner


 

I, Richard Burton, state on behalf of CreditAnswers, LLC a/k/a Debt Mediation Initiative, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of CreditAnswers, LLC a/k/a Debt Mediation Initiative; that CreditAnswers, LLC a/k/a Debt Mediation Initiative agrees freely and without threat or coercion of any kind to comply with the sanctions entered herein; and that CreditAnswers, LLC a/k/a Debt Mediation Initiative voluntarily agrees to enter into this Consent Order, expressly waiving the procedural rights set forth herein as to the matters described herein.                                            


                                            By:  ________/s/_________
                                                   Name: Richard Burton
                                                   Title:  G.C.
                                                   CreditAnswers, LLC
                                                   a/k/a Debt Mediation Initiative
                                                   
                                                   

State of:  Texas

County of:  Collin

On this the 6th day of October 2011, before me, Bonnie Seggelink, the undersigned officer, personally appeared Richard Burton, who acknowledged himself to be the G.C. of CreditAnswers, LLC a/k/a Debt Mediation Initiative, a member managed/manager managed limited liability company, and that he as such G.C., being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself as Richard Burton.

In witness whereof I hereunto set my hand.


                                         ________/s/_________
                                         Notary Public
                                         Date Commission Expires:  7-10-13

 

I, Richard Burton, state on behalf of CreditArbitrators, LLC, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of CreditArbitrators, LLC; that CreditArbitrators, LLC agrees freely and without threat or coercion of any kind to comply with the sanctions entered herein; and that CreditArbitrators, LLC voluntarily agrees to enter into this Consent Order, expressly waiving the procedural rights set forth herein as to the matters described herein.                                           


                                            By:  ________/s/_________
                                                  Name:  Richard Burton
                                                  Title:  G.C.
                                                  Credit Arbitrators, LLC                                                 

State of:  Texas

County of:  Collin

On this the 6th day of October 2011, before me, Bonnie Seggelink, the undersigned officer, personally appeared Richard Burton, who acknowledged himself to be the G.C. of CreditArbitrators, LLC, a member managed/manager managed limited liability company, and that he as such G.C., being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself as Richard Burton.

In witness whereof I hereunto set my hand.


                                         ________/s/_________
                                         Notary Public
                                         Date Commission Expires:  7-10-13


Administrative Orders and Settlements