Atlanta (CBS46)-Judiciary Secretary Chris Carr, Burlington Financial Group, LLC said Catherine Burnham, San Yi, and Richard Burnham (Burlington) violated telemarketing sales rules and fair business practices. Entered Consent Judgment to Settle Allegations Act (FBPA), and Debt Adjustment Act related to marketing, selling, and providing debt relief and credit repair services.
State and federal officials said the group targeted economically vulnerable consumers, many of whom were older, through telemarketing solicitations. According to officials, the solicitation falsely promised that corporate services would eliminate credit card debt and improve consumers’ credit scores.
The company, which has been soliciting since at least 2015, has collected hundreds of thousands of dollars in prepaid fees, misleading consumers about the consequences of the program.
Officials said some customers were forced to increase their debt and lower their credit scores. In some cases, consumers have been exposed to lawsuits and bankruptcies.
Suspicion of fraud began with the company sending monthly email solicitations to encourage Georgians to purchase a “credit card bailout program.” The advertisement contained multiple deceptive statements that misrepresented the company’s name and location. Authorities also reported that advertising created debt savings for consumers.
Burlington violated three major provisions of Georgia’s debt adjustment law, according to a spokesperson for the State Attorney General’s office.
Under Georgia law, a debt adjustment company may not charge a Georgia consumer more than 7.5% of the amount that a consumer deposits with the debt adjustment company each month.
Georgia law also requires that all funds, minus fees, must be paid to the consumer’s creditors within 30 days of receipt from the consumer. However, Burlington was unable to distribute the money it raised to consumer creditors.
Debt adjustment companies also need to maintain separate trust accounts for customer funds and specific insurance coverage to protect consumers. A copy of these audit and insurance policies must be submitted annually to the Attorney General’s Consumer Protection Department. Burlington allegedly did not comply with these provisions.
“Illegal debt adjustment practices abuse already vulnerable consumers, such as the elderly and at-risk adults, by damaging their credibility and exposing them to legal consequences,” said Attorney General Chris Kerr. .. “We do not tolerate this unfair conduct in Georgia.”
The Consent Decree requires Burlington to permanently suspend operations in Georgia and pay CFPB a $ 150,000 civil penalty, of which $ 15,000 will be paid to the state.
In addition, affected consumers will receive compensation through the CFPB Consumer Compensation Fund. However, if the court finds that Burlington has failed to disclose material assets, or that any of its financial statements contain material misstatement or omissions, Burlington will reimburse Georgia for $ 30 million in consumer damages. You have to pay money and a civil penalty of $ 8.1 million.