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5 bay area firms targeted in credit scam inquiry

TALLAHASSEE — Florida's attorney general is targeting five Tampa Bay area companies in a statewide campaign against scams on people desperate for relief from debt and credit problems.

The effort against so-called debt-relief companies comes as Attorney General Bill McCollum's office has seen consumer complaints increase more than 60 percent over last year, a stark reflection of the rapidly deteriorating economy.

The state has already settled with New Leaf Associates of Port Richey, which promised thousands of people nationwide that it could eliminate debt and improve credit scores through a secret "legal administrative process."

No such process existed, McCollum said. New Leaf has agreed to pay $320,000 in fines and restitution to its victims.

"This was absolutely a total scam," McCollum said, adding he was alarmed that there are "a lot" of similar companies that use Florida as a national headquarters.

This week, McCollum filed suit against Dunedin-based Enterprise Technology Group, which was operating as Ameritrust Financial Card. The state says the company charged $200 enrollment fees for a credit card that it claimed would perform like a normal card and could improve a person's credit score.

But the "credit builder" card was good only with Ameritrust's online catalog, the suit states, and the company never reported consumers' accounts to a credit bureau.

A phone number for Enterprise Technology Group did not appear to be working Wednesday.

McCollum's office has also subpoenaed records from three other bay area debt-relief companies: Financial Freedom Resources Inc. of Clearwater, Specialized Funding of Largo and United Debt Solutions, also known as American Debt Arbitration of Tampa.

McCollum said companies being looked at — there are 31 in Florida — are suspected of violating the state's Deceptive and Unfair Trade Practices Act along with other laws regulating telephone solicitation and credit counseling services.

"I want to close these companies down," McCollum said. "Most of these companies are bad, bad, bad."

There are some reputable debt-management companies, he added, but those typically help people come up with a strategy to pay off their bills, not offer new products and services. He said consumers in need of relief should follow some simple guidelines: Be very wary of any company that contacts you by telephone or the Internet; make sure there are no up-front fees; and, most of all, "ask a lot of questions."

Brad Ashwell, a consumer advocate for the Florida Public Interest Research Group, said people should first try to resolve problems themselves.

"Many times a collection agency will settle for a lower payment, and even eliminate late fees and penalties," he said. "This may leave a blemish on a consumer's credit report, but it's one of several ways to stop the downward spiral into deep debt."

5 bay area firms targeted in credit scam inquiry 10/15/08 [Last modified: Friday, October 17, 2008 6:00pm]
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