Debt Relief settles case, must pay customers

A Texas debt adjustment company has agreed to refund $527,205.55 in fees to 330 Georgians to settle charges it violated state law.

Debt Relief USA Inc. also will reimburse the Governor’s Office of Consumer Affairs $40,000 for expenses and will cease operations in the state until its practices comply with the Georgia Debt Adjustment Act.

The consumer affairs office alleged the company, which negotiates debts down for borrowers who have problems paying creditors, charged more than the 7.5 percent the law allows debt adjusters to take from the amount customers deposit each month to pay their creditors.

The office also said Debt Relief USA did not pay clients’ creditors within 30 days of receipt as the law requires and that it did not maintain separate trust accounts and insurance for each customer.

Cathy Mendelsohn, a spokeswoman for the office, said 93 metro Atlanta consumers were among those affected. She declined to say how much the customers were charged.