In June 2013, the CFPB sued American Debt Settlement Solutions (ADSS), a debt-relief service provider, for allegedly collecting illegal advance fees from customers for settlement services. The CFPB said ADSS “engaged in abusive acts or practices by ‘signing up and charging fees to vulnerable consumers who the defendants knew had inadequate incomes to complete the debt-relief programs in which they were enrolled.'” ADSS reportedly “charged about $500,000 in fees to hundred of consumers in multiple states.” In June 2013, the CFPB ordered ADSS to “pay nearly $500,000 in damages and a civil penalty of $15,000.”

• The CFPB filed a lawsuit against American Debt Settlement Solutions, inc., and Michael DiPanni in US District Court Southern District of Florida. [CFPB v. American Debt Settlement Solutions, Inc., and Michael DiPanni, case no. 9:13-cv-80548-DMM, filed 05/30/13]

• The CFPB brought charges against American Debt Settlement Solutions (ADSS) and its owner Michael DiPanni “for allegedly misleading consumers and charging illegal fees for services.” The CFPB alleged that they “routinely charged consumers illegal upfront fees for debt-relief services that rarely materialized.” The debt-relief service provider allegedly “charged about $500,000 in fees to hundreds of consumers in multiple states.” [“Complaints says American Debt Settlement Solutions misled consumers,” South Florida Business Journal, 05/31/13]

• The CFPB alleged that ADSS “engaged in abusive acts or practices by ‘signing up and charging fees to vulnerable consumers who the defendants knew had inadequate incomes to complete the debt-relief programs in which they were enrolled.'”

The CFPB reached a settlement with American Debt Settlement Solutions requiring them to “pay nearly $500,000 in damages and a civil penalty of $15,000.” In addition, it closed down its operations. [Jaclyn Jaeger, “CFPB Takes First Action Actions ‘Abusive Practices’,” Compliance Week, June 2013]