Overcharged for Debt Settlement?

Overcharged for Debt Settlement?

Unfortunately, many Florida consumers are overcharged for debt settlement services.  Further, these companies often make false and misleading statements to solicit payment and encourage consumers to default on debt.

Does Florida Have a Debt Settlement Statute?

Yes.  The Credit Counseling Services Act, Section 817.801, Florida Statutes, as enforced through the Florida Deceptive and Unfair Trade Practices Act, Section 501.201, Florida Statutes, collectively prohibit persons engaged in debt adjusting from engaging in abusive, deceptive, and unfair practices.  Among the many unfair and deceptive practices regulated are predatorily high fees.

The Florida Debt Settlement Statute defines “Debt Management Services” as services provided to a debtor by a credit counseling organization for a fee to:

(a) Effect the adjustment, compromise, or discharge of any unsecured account, note, or other indebtedness of the debtor; or

(b) Receive from the debtor and disburse to a creditor any money or other thing of value.

How Much Can a Debt Settlement Company Charge?

As set forth in 817.801(4), Florida Statutes, “It is unlawful for any person, while engaging in debt management services or credit counseling services, to charge or accept from a debtor residing in this state, directly or indirectly, a fee or contribution greater than $50 for the initial setup or initial consultation. Subsequently, the person may not charge or accept a fee or contribution from a debtor residing in this state greater than $120 per year for additional consultations or, alternatively, if debt management services as defined in s. 817.801(4)(b) are provided, the person may charge the greater of 7.5 percent of the amount paid monthly by the debtor to the person or $35 per month.”

Damages for Florida Debt Settlement Violations

Any consumer overcharged for debt settlement services may be entitled to damages.  The Florida Debt Settlement Statute provides for actual damages, but in no case less than the amount paid by the consumer to the credit counseling agency, plus reasonable attorney’s fees and costs.

If you have been overcharged for debt settlement services or would like more information, please call Attorney Scott Florin at (813)404-1203 for a free consultation.