November 4, 2010
Jefferson City, Mo. - Attorney General Chris Koster today announced his office has reached a settlement with Maryland-based AscendOne Corporation in which Missouri will receive $160,000. The settlement includes 19 other states and the District of Columbia. The settlement stems from allegations the company unlawfully offered and sold debt management services to consumers. Koster filed the petition earlier today in the Circuit Court for St. Louis City.
Koster said debt management services are offered by credit counseling agencies. The consumer will make monthly payments to the counseling agency, which in turn pays the consumer's creditors at a negotiated monthly payment amount, or debt management plan.
Koster alleged that AscendOne misled consumers by representing that a non-profit credit counseling agency would perform its debt management services when, in fact, AscendOne performed the services, and that consumers would receive credit counseling, though many consumers had little or no contact with a credit counselor. In addition, Koster alleged that some of the consumers AscendOne enrolled into debt management plans did not benefit from the plans.
"Many people are struggling to pay their bills during these difficult economic times, and unfortunately, there are companies that will take advantage of consumers who are just trying to do the right thing and pay their debts," Koster said. "There are many debt counselors who will provide services at no charge to the consumer. To find a reputable organization, contact the National Foundation for Credit Counseling at www.nfcc.org or 800-388-2227."
The Consent Order prohibits AscendOne from misrepresenting that their services are performed by a non-profit; from misrepresenting the purpose of the fees they charge; and from misrepresenting the impact entering into a debt management plan could have on a consumer's credit history. The Consent Order also provides that AscendOne and owner Bernaldo Dancel cannot enroll consumers in debt management plans without first determining that the consumer can afford the plan and providing the consumer with meaningful credit counsel. The total settlement with the states and District of Columbia is $4.5 million.