On October 18, the Minnesota Attorney General (AG) secured an Assurance of Discontinuance (AOD) between the State of Minnesota and two debt settlement companies (the respondents) regarding allegations that the companies engaged in unlawful debt settlement practices in Minnesota, including operating without the required registration, failing to execute compliant written agreements, and misrepresenting their services to consumers.

The AG alleged respondents marketed, sold and provided debt settlement services to Minnesota consumers without first registering with the Minnesota Department of Commerce. Furthermore, the companies allegedly imposed charges or received payments without executing written agreements and without performing all agreed-upon services. Additionally, the companies are accused of misrepresenting their services leading to “consumer confusion or misunderstanding.”

To resolve these allegations, the AOD stipulated respondents must cease all business operations in Minnesota unless they become properly registered. They are also required to pay over $1 million to the Attorney General, representing the total amount of payments received from consumers minus refunds and chargebacks. Respondents must also provide a complete and accurate list of all Minnesota consumers they contracted, including payment, chargeback, and refund amounts. Additionally, the companies face a stayed civil money penalty of over $500,000, which will be enforced if they violate the terms of the AOD.