Attorney General's Office Obtains $126,000 Judgment Against Family Credit Counseling Corp., Owner
CHARLESTON – West Virginia Attorney General Patrick Morrisey today announced that Kanawha County Circuit Court Judge James C. Stucky ordered now-defunct credit counseling agency Family Credit Counseling Corporation (FCCC) and North Carolina-based businessman James R. Armstrong to pay a summary judgment of $126,085.22 for collecting excessive fees from West Virginia customers.
Judge Stucky’s ruling stems from a complaint alleging Armstrong owned and operated several for-profit companies that solicited consumers to enroll in debt management plans that were administered by FCCC, a non-profit company Armstrong also owned. In a debt management plan, a non-profit company works with a consumer and his or her creditors to negotiate a payment system in order to repay credit card debt.
Debt management plans, as well as credit counseling and other services, are regulated by the state’s debt pooling statute, which prohibits upfront fees and limits monthly service fees for non-profit agencies to 7 percent of the monthly payment amount. The ruling states Armstrong and FCCC overcharged FCCC’s 250 customers in West Virginia a total of $95,737 in upfront fees and $30,348.22 in monthly service fees.
The Attorney General’s office filed the complaint after receiving complaints from consumers who claimed payments they made to FCCC were not being distributed in a timely manner to their creditors. Other consumers complained FCCC stopped making payments all together.
“The type of service offered by debt-relief and credit counseling agencies typically is very beneficial to consumers who want to pay off their credit cards but may need a little more time to do so,” Morrisey said. “However, in this case, many West Virginia residents did not receive the services as promised. We will take firm action against businesses that take advantage of residents trying to do the right thing.”
A copy of the ruling
is available on the West Virginia Attorney General’s website.