Agency Sanctions Burnsville Credit Repair/Debt Settlement Company
10/26/2015 10:05:23 AM
SAINT PAUL – Following an investigation and enforcement action against a Burnsville company that provides credit repair services, Minnesota Commerce Commissioner Mike Rothman is offering tips to Minnesota consumers who are seeking assistance to manage debts or improve their credit ratings.
Earlier this month, the Commerce Department imposed a $150,000 civil penalty against McGlynn Marketing, also known as United Credit Consultants (UCC) and Debt Settlement Solutions.
A consent order alleges that McGlynn used improper contracts, charged and collected improper fees, engaged in dishonest practices and demonstrated financial irresponsibility. As part of the consent order, the company is required to reform its business practices to comply with Minnesota laws; otherwise, the Commerce Department will revoke its licenses as a credit services organization and debt settlement service provider.
“There are services available to help consumers who are in financial straits because of high debt or low credit ratings,” said Rothman. “But consumers need to be on guard against any company that promises a quick fix or a painless way out of debt while charging illegal upfront fees.”
In Minnesota, the Commerce Department regulates credit service organizations and debt settlement service providers, both of which offer credit repair. Neither type of business is allowed to charge a fee to a consumer until it fully performs the services outlined in a signed contract.
Credit service organizations offer education and personalized advice to consumers for a fee. They advertise that they can improve your credit rating or history, help you obtain credit and offer credit advice or assistance.
Debt settlement service providers charge a fee for advice or to act as an intermediary between a debtor and the debtor’s creditors to obtain a settlement for less than the full amount of debt. These services include debt relief, debt negotiation and debt reduction.
In addition, the Commerce Department regulates debt management service providers. These companies also charge a fee to help over-extended consumers develop a budget and a debt management plan to re-pay creditors. They are permitted to charge a limited upfront or ongoing fee for their services.
Rothman offers the following tips to consumers who are interested in these credit repair services:
Call our Consumer Services Center at 651-539-1600 or toll-free at 800-657-3602 (in Greater Minnesota) if you have any questions about credit repair services or believe you are the victim of a scam or fraud.
Banking & Finance