Attorney General Charlie Crist News Release
April 27, 2006
Contact: Jenn Meale
Phone: (850) 245-0150
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Crist Reaches $230,000 Settlement with Debt Relief Company

TALLAHASSEE - Attorney General Charlie Crist today announced that his office has reached a settlement with a debt relief company that calls for the business to provide $230,000 to reimburse consumers who paid fees to the company but failed to gain debt relief. The agreement resolves consumer complaints about the business practices of Emergency Debt Relief, Inc., formerly of Jacksonville, and requires the company to revise its business practices.

Emergency Debt Relief (EDR) claimed it could reduce consumers’ payments to creditors by up to 50 percent. The company also claimed it could settle the average consumer's debts for 35 to 45 percent of the original amount owed, and could help consumers become debt-free in as little as 12 months. However, EDR charged a high monthly fee – equivalent to 18 percent of the consumer's total indebtedness – and failed to negotiate the debt even after receiving large fee payments from consumers.

"Those who are deep in debt need a helping hand, not a shovel to dig deeper," said Crist. "This settlement will bring them some relief."

Crist’s office began investigating EDR in March 2005 after receiving complaints from consumers who claimed they paid the company’s fee, which ranged from several hundred to several thousand dollars, but then received no service. The consumers said that even after they paid for EDR’s debt relief services, they continued to receive harassing phone calls from creditors and their credit rating continued to suffer. More than 45 complaints against EDR were filed with Crist’s office.

Under the agreement, EDR along with its former owners, Franklin and Joseph Valinho, will provide $115,000 to reimburse consumers who have already filed complaints and will create a separate $115,000 reimbursement fund for affected consumers who might file complaints later. In addition to reimbursing consumers, the company must revise its business practices to better serve consumers. The company formerly operated in Jacksonville, but was sold last year and relocated to Pennsylvania.

A copy of the agreement with EDR is available at:$file/EDR_AVC.pdf