Attorney General Chris Koster was in Washington, D.C. today testifying before the Senate Commerce Committee.
The first-term Democratic official was talking about the explosion of “companies and individuals who specialize in servicing, or preying upon, consumers who have significant credit card debt or unsustainable mortgage debt.”
In prepared remarks, Koster said that these aforementioned companies promise consumers to help with debt without significant pain. But in reality, Koster said a number of these ventures could actually make the situation worse.
“The real secret here is that these companies are offering a service that consumers could do for themselves, or that
non-profit credit counselors will perform for free or a modest fee,” Koster said. “Moreover, one of the primary strategies relied upon by these debt settlement and mortgage companies is to convince consumers to stop all payments to and communications with his or her creditors, which of course leads to long-term damage to the consumer’s credit rating and hundreds, if not thousands, of dollars in additional fees and debt.”
Koster suggested several ideas to the committee, including:
- Banning up-front fees from foreclosure consultants or credit repair firms.
- Applying those restrictions to law firms and lawyers specializing in debt settlement work.
- Punishing companies that use governmental logos without permission.
- Restricting advertisements and solicitations around reverse mortgages and particularly sale-leaseback arrangements.
Koster was the only state attorney general testifying before the Commerce Commitee. Sen. Claire McCaskill, D-Missouri, is a member of the committee.
You can read Koster’s full statement by clicking here.
Tags: chris koster, d.c., mortage fraud, washingtonCategories: Consumer Interest, Politics, State Politics.
