DOB: New Life Financial Solutions, Inc. - Temp CD-Rest-NOI CD-CP

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IN THE MATTER OF:

NEW LIFE FINANCIAL
SOLUTIONS, INC.
a/k/a NEW LIFE CONSULTANTS

     ("Respondent")


 
  





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TEMPORARY ORDER TO
CEASE AND DESIST

ORDER TO MAKE RESTITUTION

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 Connecticut General Statutes, as amended by Public Act 12-96, 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, as amended, provides, in pertinent part, that:

The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 and the Freedom of Information Act, as defined in section 1-200; (1) 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, (2) require or permit any person to testify, produce a record or file a statement in writing, under oath, or otherwise as the commissioner determines, as to all the facts and circumstances concerning the matter to be investigated or about which an action or proceeding is pending . . . .

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 of the Connecticut General Statutes, as amended by Public Act 12-96, provides, in pertinent part, that:

(a) (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 not later than fourteen days after 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. . . .

(c)  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, in addition to any other remedy authorized by law, order such person to (1) make restitution of any sums shown to have been obtained in violation of any such provision . . . plus interest at the legal rate set forth in section 37-1 . . . .  After the commissioner issues such an order, the person named in the order may, not later than fourteen days after receipt of such order, file a written request for a hearing.  The order 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 hearing shall be held in accordance with the provisions of chapter 54.


II.  MATTERS ASSERTED

1.
Respondent is a California corporation with an office at 800 Park View Drive, #222, Hallandale Beach, Florida.  Respondent was also a Florida corporation, but filed for voluntary dissolution effective August 17, 2012.
2.
From at least September 2011 to the present, Respondent has offered debt negotiation services via the telephone and the Internet at newlifeconsultants.net.  According to its website, Respondent provides advice and referrals for reducing balances, interest rates and payments on credit card debt; advice and referrals for reducing balances, interest rates and payments on mortgage and housing costs; and expert help on negotiating to reduce the burden of outstanding medical bills.
3.
On September 13, 2011, a Connecticut resident, while physically present in this state, entered into an Agreement for Services with Respondent for assistance in debt negotiation of secured and unsecured debt (“Agreement”).  In particular, the Agreement states, in pertinent part, that “NLFS advises, counsels, and tries to assist you in placing your debts with a 3rd Party service provider . . . who will attempt to negotiate settlement of the debts, including but not limited to, reduction of interest rates, refinances, debt modifications, tax debt, tax liens, lien strips and/or may provide other services related to you [sic] debts with the creditors listed in the documents you submit”.  (Emphasis in original.)
4.
In furtherance of the Agreement, between September 30 and November 15, 2011, the Connecticut resident remitted total payments of $2,376.70 to Respondent.  By letter dated November 28, 2011, the Connecticut resident complained to this department that Respondent had failed to perform the services specified in the Agreement.
5. The fees charged by Respondent were in excess of amounts that debt negotiators may charge pursuant to the Schedule of Maximum Fees established by the Commissioner on or about October 1, 2009 ("Schedule of Maximum Fees").  The Schedule of Maximum Fees only allows fees prior to settlement in connection with the negotiation of unsecured debt in amounts not to exceed a one-time initial fee of $50 and monthly service fees of $40.
6. At no time relevant hereto has Respondent been licensed to engage or offer to engage in debt negotiation in this state, nor does Respondent qualify for an exemption from such licensure.
7. On or about March 22, 2012, the Connecticut resident received a phone call from Respondent, acting under the name First United Consultants, offering debt negotiation services.
8.
On September 25, 2012, the Federal Trade Commission filed a Complaint for Permanent Injunction and Other Equitable Relief in the United States District Court, Northern District of Ohio, Eastern Division, against E.M.A. Nationwide, Inc., New Life Financial Solutions, Inc. and 1UC Inc. also d/b/a 1st United Consultants and First United Consultants, among others (“Complaint”), alleging that since at least June 2010, such persons marketed and sold debt-related services, including debt settlement, loan modification and mortgage assistance relief services, to consumers nationwide and violated various federal statutes and regulations, including the federal Telemarketing Sales Rule.  The Complaint lists 800 Park View Dr. #222, Hallandale Beach, Florida as an address for each E.M.A. Nationwide, Inc., New Life Financial Solutions, Inc. and 1UC Inc.


III.  STATUTORY BASIS FOR ORDER TO CEASE AND DESIST,
ORDER TO MAKE RESTITUTION 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; . . . (4) “mortgagor” means a debtor who is an owner of residential property, including, but not limited to, a single-family unit in a common interest community, who is also the borrower under a mortgage encumbering such residential property; . . . and (7) “residential property” means one-to-four family owner-occupied real property.

(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-671 of the 2012 Supplement to the General Statutes, which incorporates Section 40 of Public Act 11-216, effective October 1, 2011, provides, 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; . . . (4) “mortgagor” means a debtor who is an owner of residential property, including, but not limited to, a single-family unit in a common interest community, who is also the borrower under a mortgage encumbering such residential property; . . . and (7) “residential property” means one-to-four family owner-occupied real property.

(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 in person, by mail, by telephone or via the Internet; or (3) has its place of business located outside of this state and the services concern 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.

1.
Respondent’s offering to engage in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 1, 2 and 5 of the Matters Asserted, constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes.  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, issue an order to make restitution pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-50(c) of the Connecticut General Statutes, as amended, 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, as amended.  Section 36a-50(a) of the Connecticut General Statutes, as amended, authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
2.
Respondent’s offering to engage in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 1, 2 and 6 through 8, 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, and Section 36a-671(b) of the 2012 Supplement to the General Statutes.  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, as amended.  Section 36a-50(a) of the Connecticut General Statutes, as amended, authorizes the Commissioner to impose a civil penalty upon Respondent 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 the public welfare requires immediate action to issue a temporary order requiring Respondent to cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes, 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 Respondent is continuing to offer its debt negotiation services in Connecticut via the Internet while not duly licensed, and the interests of Connecticut residents who are already in debt may be materially prejudiced by Respondent’s charging excessive fees and failing to perform the contracted debt negotiation services.


V.  TEMPORARY ORDER TO CEASE AND DESIST, ORDER TO MAKE
RESTITUTION,
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 Respondent has 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, issue an order to make restitution pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-50(c) of the Connecticut General Statutes, as amended, 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 to the General Statutes, as amended;

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 New Life Financial Solutions, Inc. a/k/a New Life Consultants immediately CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes.  This Temporary Order shall become effective upon receipt by New Life Financial Solutions, Inc. a/k/a New Life Consultants, 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-17(a) of the 2012 Supplement to the General Statutes, as amended, and Section 36a-52(b) of the Connecticut General Statutes, that:  Not later than fourteen (14) days from receipt of this Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing, New Life Financial Solutions, Inc. a/k/a New Life Consultants shall provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov, 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.

THE COMMISSIONER FURTHER ORDERS, pursuant to Section 36a-50(c) of the Connecticut General Statutes, as amended, that New Life Financial Solutions, Inc. a/k/a New Life Consultants MAKE RESTITUTION of any sums obtained as a result of New Life Financial Solutions, Inc. a/k/a New Life Consultants violating Section 36a-671(b) of the Connecticut General Statutes in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes, plus interest at the legal rate set forth in Section 37-1 of the Connecticut General Statutes.  Specifically, the Commissioner ORDERS that:  Not later than forty-five (45) days from the date this Order to Make Restitution becomes permanent, New Life Financial Solutions, Inc. a/k/a New Life Consultants shall:

1.
Repay each Connecticut resident identified in Exhibit A attached hereto and any other Connecticut resident who entered into an agreement for debt negotiation services with New Life Financial Solutions, Inc. a/k/a New Life Consultants on and after October 1, 2009, any fees paid by such Connecticut resident to New Life Financial Solutions, Inc. a/k/a New Life Consultants plus interest.  Payments shall be made 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.

NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes, and impose a CIVIL PENALTY upon Respondent as set forth herein, subject to its right to a hearing on the allegations set forth above.
 
A hearing will be granted to 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 Respondent’s receipt of this Temporary Order to Cease and Desist, Order to Make Restitution, 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 Section 36a-52(a) of the Connecticut General Statutes and Section 36a-50(a) of the Connecticut General Statutes, as amended.  This Temporary Order to Cease and Desist, Order to Make Restitution, 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 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 April 3, 2013, 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 Respondent fails to appear at the requested hearing.  At such hearing, Respondent 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 Respondent does not request a hearing within the time period prescribed or fails to appear at any hearing, the Order to Make Restitution shall remain in effect and become permanent against Respondent, and the Commissioner will issue an order that Respondent cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Respondent.


So ordered at Hartford, Connecticut
this 5th of February 2013.                        ________/s/_________
                                                               Howard F. Pitkin
                                                               Banking Commissioner


CERTIFICATION

I hereby certify that on this 6th day of February 2013, the foregoing Temporary Order to Cease and Desist, Order to Make Restitution, 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 New Life Financial Solutions, Inc. a/k/a New Life Consultants, at 800 Park View Drive, #222, Hallandale Beach, Florida 33008, certified mail no. 70112000000247315782; and at P.O. Box 595, North Hollywood, California 91603, certified mail no. 70112000000247315799.

                                                              ________/s/_________
                                                              Stacey L. Serrano
                                                              Prosecuting Attorney


Administrative Orders and Settlements