Attorney General Pam Bondi and the Federal Trade Commission announced a settlement with several related debt relief and credit repair services companies and their principal. The settlement resolves allegations that Chastity Valdes and her companies, Consumer Assistance LLC, Consumer Assistance Project Corp. and Palermo Global LLC, engaged in unlawful debt relief operations targeting student loan holders. Among other things, the settlement bans the defendants from operating in the debt relief and credit repair industries.
In 2016, Attorney General Bondi’s Office and the FTC filed a joint lawsuit against Valdes and her companies, alleging the defendants took illegal up-front fees in return for their purported debt relief and credit repair services. According to the complaint, the defendants allegedly falsely claimed these services reduced consumers’ student loan debt and repaired consumers’ credit. The complaint also asserted violations of the Florida Deceptive and Unfair Trade Practices Act, the FTC Act, the Telemarketing Sales Rule and the Credit Repair Organizations Act.
As part of the settlement, the defendants are banned from selling debt relief and credit repair services and prohibited from making material misrepresentations about any products or services. The defendants are also barred from misrepresenting endorsements, profiting from consumers’ personal information and failing to dispose of personal information properly.
The order also imposes a judgment of more than $2.3 million, which will be suspended upon the surrender of virtually all of the defendants’ assets. If the defendants are found to have misrepresented their financial condition, the full judgment will become due immediately.
To view the stipulated order, click here.