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Karl A. Racine
Office of the Attorney General for the District of Columbia

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Corporation Counsel Announces Consumer Protection Lawsuit Against Credit Debt Solutions Inc.

Tuesday, June 17, 2003

(Washington, DC) The District of Columbia Office of the Corporation Counsel today filed a consumer protection lawsuit against Credit Debt Solutions Inc. (CDS) and two of its principals, Barbara Carr and James A. Kehoe, III. The suit alleges that CDS engages in unlawful trade practices and unlawful charitable solicitations in connection with their offer of debt management and credit counseling services.

CDS has signed up consumers from across the country who are struggling to meet their debt payments. The company claims that it helps consumers lower their debt payments and consequently get out of debt sooner. Instead, the lawsuit alleges, many consumers who seek the assistance of CDS discover that the debt payments they send to the company never make it to their creditors. These financially strapped consumers have also lost the "voluntary" contribution of one month's debt payments, which CDS requires of consumers who seek its help.

"The District of Columbia will not tolerate abuse of vulnerable citizens," declared Robert Spagnoletti, Acting Corporation Counsel for the District of Columbia. "Businesses should get the message that the District of Columbia will not be a safe haven for consumer scams."

The District lawsuit seeks a permanent injunction from the Court to stop the company's deceptive practices. The suit is also seeking restitution for consumers, civil penalties, costs and fees. Consumers with questions about this action can call OCC's consumer complaint hotline at (202) 442-9828 or contact OCC online.

Consumer education and complaint information can be found on OCC's consumer protection website.