Attorney General Racine Obtains Settlement against Company That Falsely Claimed to Eliminate Debt
released on May 23, 2017
found in newsletter: May 2017
WASHINGTON, D. C. – Attorney General Karl A. Racine announced today that the Office of the Attorney General (OAG) Office of Consumer Protection has obtained a settlement with a consent judgment against Burlington Financial Group, LLC (Burlington) and its owner and manager, Sang Yi, for falsely promising to reduce or eliminate debt for consumers.
The Maryland-based Burlington is an example of a company that promised debt-reduction assistance for consumers and charged fees while only providing services that consumers could procure for free elsewhere. In return for their services, Burlington Financial Group and Sang Yi charged significant fees. For example, one District consumer agreed to make installment payments to Burlington totaling an eye-popping $30,089.70.
Under the terms of the settlement, Burlington and Sang Yi will:
Reimburse District consumers for all payments they made to the company (a total amount of at least $51,254);
Pay $40,000 in costs and civil penalties to the District; and
Stop offering services in the District that promise a reduction or resolution of consumers’ debts.
“Many District residents are burdened by onerous debt from credit cards and other sources, and they are desperate for any solution that might reduce their payments,” Attorney General Racine said. “Burlington took advantage of consumers like these by claiming it could help in ways it couldn’t and charging for services that any consumer can obtain without charge.”
Burlington Charged Significant Fees for Services Available for Free Online
Burlington Financial Group began doing business in the District in approximately January of 2016. The company promised it would help consumers become debt-free and save thousands of dollars. However, if a consumer agreed to do business with the company, Burlington would simply send out a generic letter to the consumer’s creditors or debt collectors, disputing the consumer’s debt and directing the collectors to stop communicating with the consumer. The company previously operated under the name Flying Point Financial.
Similar form letters to dispute debt or direct the debt collector to cease contacting consumers are widely available for free online and from consumer advocacy organizations. For instance, OAG’s Office of Consumer Protection has templates of these letters available on our website; consumers can use these templates to send their own letters (more information available by following this link).
Additional Settlement Terms
In addition to refunding all fees they collected, which will return at least $51,254 to District residents, the settlement prohibits Burlington and Sang Yi from:
Directly or indirectly offering or selling any services to consumers with the purpose of assisting them in validating, disputing, resolving or reducing their debts;
Making any oral or written statements that have the capacity, tendency, or effect of deceiving or misleading consumers;
Enforcing unconscionable terms or provisions in their sales of services or property to consumers; and
Selling, providing, or performing for a fee services that they claim:
Can improve a consumer’s credit record, history, or rating; or
Provides advice or assistance to a consumer regarding any matter related to the consumer’s personal, household, or family credit.
Attorney General Racine offered thanks to the attorneys who brought the case to his attention and pursued it. “I want to thank the D.C. Bar Advice and Referral Clinic, through which this company came to our attention, and the attorneys in our Office of Consumer Protection who worked hard to gain this judgment,” he said. “In particular, my thanks to Assistant Attorney General Wendy Weinberg and Office of Consumer Protection Director Phil Ziperman and Deputy Director Jimmy Rock for their excellent work on this case. While the total funds recovered in this judgment may seem relatively small, the problem of debt-relief companies is huge for everyday consumers.”
A copy of the consent judgment is attached. Consumers who have been victimized by companies that promise relief from debt may contact the OAG Office of Consumer Protection at (202) 442-9892, by e-mailing email@example.com, or by filing a complaint via our web form.
Original Press Release