DOB: Creative Media Consulting - Temp CD-NOI CD-CP

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IN THE MATTER OF:

CREATIVE MEDIA
CONSULTING, INC.
d/b/a DEBT RESOLUTION BAILOUT /
PLAN B CONSULTING GROUP /
CREATIVE MEDIA
CONSULTING INC.
("Creative Media Consulting")

LAW OFFICES OF
HERBERT DAVIS
A PROFESSIONAL
LAW CORPORATION
d/b/a PERFORMANCE DEBT
RESOLUTION
("Herbert Davis")

    (collectively, "Respondents")

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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

I. LEGAL AUTHORITY AND JURISDICTION

The Banking Commissioner (“Commissioner”) is charged with the administration of Sections 36a-671 to 36a-671e, inclusive, of the Connecticut General Statutes contained in Part II of Chapter 669 of the Connecticut General Statutes, “Debt Adjusters and Debt Negotiation”.
 
Pursuant to the authority granted by Section 36a-17(a) of the 2012 Supplement to the General Statutes, the Commissioner, through the Consumer Credit Division of the Department of Banking, has investigated the activities of Respondents to determine if they have violated, are violating or are about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner.
 
Section 36a-17(a) of the 2012 Supplement to the General Statutes provides:

The commissioner, in the commissioner’s discretion, may make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner.

Section 36a-52 of the Connecticut General Statutes provides, in pertinent part, that:

(a)  Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending.  Any such notice shall include:  (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes . . . alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.  If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice, unless the person fails to appear at the hearing.  After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice.  If 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.

(b)  If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section.  Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.

Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part, that:

(1)  Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending.  Any such notice shall include:  (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes . . . alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.

(2)  If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing.  After the hearing, if the commissioner finds that the person has violated any such provision, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.  If 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.

(3)  Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54.

Section 36a-671a(c) of the 2012 Supplement to the General Statutes provides, in pertinent part, that:

Upon complaint, the commissioner may review any fees or charges assessed by a person engaging or offering to engage in debt negotiation services and order the reduction of such fees or charges or repayment of such amount of the fees or charges that the commissioner deems excessive, taking into consideration the fees that other persons performing similar debt negotiation services charge for such services and the benefit to the consumer of such services. . . .


II.  MATTERS ASSERTED

1.
Creative Media Consulting is a Utah corporation with an office at 789 East Bamberger Drive, Suite D, American Fork, Utah.
2.
Herbert Davis was a California professional law corporation with offices at 601 West 5th Street, Suite 800, Los Angeles, California; and 18653 Ventura Boulevard, Suite 335, Tarzana, California.
3.
On or about April 6, 2010, a Connecticut resident, while physically present in this state, entered into a Debt Resolution Bailout Agreement (“Bailout Agreement”) with Creative Media Consulting, which included “Debt Resolution Services” by the Law Offices of Herbert Davis, for service related to the settlement of such Connecticut resident’s unsecured debts.
4.
In connection with the Bailout Agreement, the Connecticut resident referred to in paragraph 3 above remitted total payments of $2,947.87 to Herbert Davis, which amount is in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees established by the Commissioner on or about October 1, 2009 (“Schedule of Maximum Fees”).
5.
On or about November 13, 2009, two other Connecticut residents, while physically present in this state, entered into an agreement (“Agreement”) with Herbert Davis for assistance in settling such Connecticut residents’ disputes with such residents’ unsecured creditors.
6. In connection with the Agreement, the Connecticut residents referred to in paragraph 5 above remitted total payment of $28,021.95 to Herbert Davis, which amount is in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees.
7.
The Schedule of Maximum Fees which provides, in pertinent part, that “[a] debt negotiator of unsecured debt may collect total aggregate fees including the initial fee and service fees, not to exceed ten percent (10%) of the amount by which the consumer’s debt is reduced as part of each settlement as agreed to in the debt negotiation service contract as each settlement is achieved”.
8. At no time relevant hereto were Respondents licensed to engage or offer to engage in debt negotiation in this state, nor did Respondents qualify for an exemption from such licensure.
9. On October 26, 2011, the Commissioner received a complaint filed by the Connecticut resident referred to in paragraph 3 above concerning Respondents’ failure to perform the debt negotiation services.
10.
On March 28, 2012, the Commissioner received a complaint filed by the Connecticut residents referred to in paragraph 5 above concerning Respondents’ failure to perform the debt negotiation services.
 

III.  STATUTORY BASIS FOR ORDER TO CEASE
AND DESIST AND IMPOSITION OF CIVIL PENALTY

Section 36a-671 of the Connecticut General Statutes, in effect prior to October 1, 2011, provided, in pertinent part, that:

(a)  As used in this section and sections 36a-671a to 36a-671d, inclusive, (1) “debt negotiation” means, for or with the expectation of a fee, commission or other valuable consideration, assisting a debtor in negotiating or attempting to negotiate on behalf of a debtor the terms of a debtor’s obligations with one or more mortgagees or creditors of the debtor; . . . (2) “debtor” means any individual who has incurred indebtedness or owes a debt for personal, family or household purposes . . .

(b)  No person shall engage or offer to engage in debt negotiation in this state without a license issued under this section for each location where debt negotiation will be conducted. . . .  A person is engaging in debt negotiation in this state if such person:  . . . (2) has a place of business located outside of this state and the debtor is a resident of this state who negotiates or agrees to the terms of the services contract in person, by mail, by telephone or via the Internet while physically present in this state; or (3) has its place of business located outside of this state and the contract concerns a debt that is secured by property located within this state.

Section 36a-671a(b) of the 2012 Supplement to the General Statutes provides, in pertinent part, that:

Whenever it appears to the commissioner that any person has violated, is violating or is about to violate the provisions of sections 36a-671 to 36a-671e, inclusive, . . . the commissioner may take action against such person . . . in accordance with sections 36a-50 and 36a-52.  For purposes of sections 36a-671 to 36a-671e, inclusive, each engagement and each offer to engage in debt negotiation shall constitute a separate violation.

Section 36a-671b(b) of the Connecticut General Statutes provides that:

No person offering debt negotiation services may receive a fee, commission or other valuable consideration for the performance of any service the person offering debt negotiation services has agreed to perform for any consumer until the person offering debt negotiation services has fully performed such service.  A person offering debt negotiation services may receive reasonable periodic payments as services are rendered, provided such payments are clearly stated in the contract.  The commissioner may establish a schedule of maximum fees that a debt negotiator may charge for specific services.

1.
Creative Media Consulting’s engaging in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 1, 3, 4 and 8 through 10, inclusive, of the Matters Asserted, constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Creative Media Consulting in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
2.
Herbert Davis’ engaging in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 2 through 10, inclusive, of the Matters Asserted, constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Herbert Davis in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
 

IV.  FINDING AND STATUTORY BASIS FOR
TEMPORARY ORDER TO CEASE AND DESIST

The Commissioner finds that public welfare requires immediate action to issue a temporary order requiring Respondents to cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and to take such action as set forth herein to effectuate the purposes of Section 36a-52(b) of the Connecticut General Statutes in that Respondents are engaging in debt negotiation with individuals who are already in debt and are being materially prejudiced by Respondents’ receiving monies from at least three (3) Connecticut residents and failing to perform the contracted services and that the interests of additional Connecticut residents also may be materially prejudiced.  The Commissioner also finds the payment of fees by the Connecticut residents to be excessive, upon consideration of the fact that the Schedule of Maximum Fees prohibits a debt negotiator from charging total aggregate fees including the initial fee and service fees in excess of ten percent (10%) of the amount by which the consumer’s debt is reduced, the debt negotiation services contracts were not successfully completed and such individuals received no benefit from such debt negotiation services.


V.  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

WHEREAS, the Commissioner has reason to believe that Respondents have engaged in acts or conduct which forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes;
 
AND WHEREAS, the Commissioner has made the finding required under Section 36a-52(b) of the Connecticut General Statutes.
 
THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that Creative Media Consulting, Inc. d/b/a Debt Resolution Bailout / Plan B Consulting Group / Creative Media Consulting Inc. immediately CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011.  This Temporary Order shall become effective upon receipt by Creative Media Consulting, Inc. d/b/a Debt Resolution Bailout / Plan B Consulting Group / Creative Media Consulting Inc., and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order.
 
THE COMMISSIONER FURTHER ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that Law Offices of Herbert Davis, A Professional Law Corporation d/b/a Performance Debt Resolution immediately CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011.  This Temporary Order shall become effective upon receipt by Law Offices of Herbert Davis, A Professional Law Corporation d/b/a Performance Debt Resolution, and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order.
 
THE COMMISSIONER FURTHER ORDERS, pursuant to Section 36a-671a(c) of the 2012 Supplement to the General Statutes and Section 36a-52(b) of the Connecticut General Statutes, that:  Not later than 10 days from receipt of this Order, Creative Media Consulting, Inc. d/b/a Debt Resolution Bailout / Plan B Consulting Group / Creative Media Consulting Inc., and Law Offices of Herbert Davis, A Professional Law Corporation d/b/a Performance Debt Resolution shall:

1.
Provide repayment of fees to the Connecticut residents and in the amounts identified in Exhibit A by cashier’s check, certified check or money order; and
2.
Provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov, evidence of such repayments and a list of all Connecticut residents with whom they have entered into agreements for debt negotiation services on and after October 1, 2009.  Such submission shall include:  (a) A copy of each agreement, and (b) a list of each debtor’s name and address and full itemization of each debtor’s payments made pursuant to the agreement, specifying the dates, amounts and to whom such payments were made.

NOW THEREFORE, notice is hereby given to Creative Media Consulting, Inc. d/b/a Debt Resolution Bailout / Plan B Consulting Group / Creative Media Consulting Inc., that the Commissioner intends to issue an order requiring Creative Media Consulting, Inc. d/b/a Debt Resolution Bailout / Plan B Consulting Group / Creative Media Consulting Inc., to CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and impose a CIVIL PENALTY upon Creative Media Consulting, Inc. d/b/a Debt Resolution Bailout / Plan B Consulting Group / Creative Media Consulting Inc., as set forth herein, subject to Creative Media Consulting, Inc. d/b/a Debt Resolution Bailout / Plan B Consulting Group / Creative Media Consulting Inc.’s right to a hearing on the allegations set forth above.
 
FURTHER, notice is hereby given to Law Offices of Herbert Davis, A Professional Law Corporation d/b/a Performance Debt Resolution that the Commissioner intends to issue an order requiring Law Offices of Herbert Davis, A Professional Law Corporation d/b/a Performance Debt Resolution to CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and impose a CIVIL PENALTY upon Law Offices of Herbert Davis, A Professional Law Corporation d/b/a Performance Debt Resolution as set forth herein, subject to Law Offices of Herbert Davis, A Professional Law Corporation d/b/a Performance Debt Resolution’s right to a hearing on the allegations set forth above.
 
A hearing will be granted to each Respondent if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following each Respondent’s receipt of this 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 as set forth in Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes.  This 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 shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending.  The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address.  If any Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”.  Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a hearing officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies.  If a hearing is requested, the hearing will be held on October 11, 2012, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
 
The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless any Respondent fails to appear at the requested hearing.  At such hearing, Respondents will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
 
If Creative Media Consulting does not request a hearing within the time prescribed, the Commissioner will issue an order that Creative Media Consulting cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, may issue an order of repayment of fees, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Creative Media Consulting.
 
If Herbert Davis does not request a hearing within the time prescribed, the Commissioner will issue an order that Herbert Davis cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, may issue an order of repayment of fees, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Herbert Davis.


So ordered at Hartford, Connecticut
this 10th day of August 2012.                       ________/s/_________
                                                               Howard F. Pitkin
                                                               Banking Commissioner


CERTIFICATION

I hereby certify that on this 10th day of August 2012, the foregoing 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 was sent by certified mail, return receipt requested, to Creative Media Consulting, Inc. d/b/a Debt Resolution Bailout / Plan B Consulting Group / Creative Media Consulting Inc., 789 East Bamberger Drive, Suite D, American Fork, Utah 84003, certified mail no. 70110470000225730133; Nathan L. Bailey, Agent for Creative Media Consulting, Inc., 789 E. Bamberger Drive, Suite D, American Fork, Utah 84003, certified mail no. 70110470000225730577; Law Offices of Herbert Davis, A Professional Law Corporation d/b/a Performance Debt Resolution, 601 West 5th Street, Suite 800, Los Angeles, California 90071, certified mail no. 70110470000225730140; Law Offices of Herbert Davis, A Professional Law Corporation d/b/a Performance Debt Resolution, 18653 Ventura Boulevard, Suite 335, Tarzana, California 91356-4516, certified mail no. 70110470000225730157; and Herbert Davis, Agent for Herbert Davis, A Professional Law Corporation, 604 W. 5th Street, Suite 800, Los Angeles, California 90071, certified mail no. 70110470000225730584.

                                                              ________/s/_________
                                                              Doniel Kitt
                                                              Prosecuting Attorney


Administrative Orders and Settlements