Laws protecting consumers against the predatory practices of unscrupulous businesses are prevalent in all fifty states, and each state’s laws are unique.
Because we are a Georgia-based law firm, we specialize in consumer protection solutions for Georgians, utilizing both Georgia laws and regulations and the large body of law created by the U.S. Congress for the protection of consumers that apply in all fifty states.
Matters that we are skilled in assisting Georgia consumers to include, but are not limited to:
- Legal actions against unscrupulous Debt Management Companies, Debt Settlement Companies, and Mortgage Modification outfits (OCGA §§ 18-5-1 et seq.)
- Suits seeking recovery for violations of the Georgia Fair Business Practices Act
(OCGA §§ 10-1-390 et seq.)
- Defending consumers against Debt Collection actions
- Legal actions for Violations of the federal Fair Debt Collection Practices Act and the Fair Credit Reporting Act
- Automobile Sales fraud and deceptive acts in the sales of vehicles
- Mortgage fraud and deceptive acts in the mortgage industry
A brief overview of one of Georgia’s consumer protection statutes is listed below:
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The Georgia Debt Adjustment Act (GDAA) (OCGA §§ 18-5-1 et seq.) is a law enacted to protect Georgia consumers from unfair, deceptive and illegal practices in the debt adjusting business.
The GDAA states that:
- “Debt adjusting” means doing business in debt adjustments, budget counseling, debt management, or debt pooling service or holding oneself out, by words of similar import, as providing services to debtors in the management of their debts and contracting with a debtor for a fee to:
- Effect the adjustment, compromise, or discharge of any account, note, or other indebtedness of the debtor; or
- Receive from the debtor and disburse to his or her creditors any money or another thing of value.
- OCGA § 18-5-1
When a company, person or other entity offers to perform debt adjusting services for a Georgia consumer the company, person or entity is restricted to entering the consumer into a Debt Management Plan, or DMP. A legal DMP should function as follows:
- The debt adjuster should engage the consumer in credit counseling to determine if a DMP is the most effective way to handle the consumer’s financial problems. A DMP is not always the solution. Sometimes the consumer’s financial problems may be too extensive, leaving only bankruptcy as an option.
- Once it is determined that a DMP would benefit the consumer, the debt adjuster should work with the consumer to structure a budget and calculate one monthly consolidated payment for all of the consumer’s unsecured debts.
- The debt adjuster should then contact the consumer’s DMP for the repayment of his debts and work with the creditors in determining the amount to be paid by the consumer each month and the interest rate to be charged while the consumer remains in the DMP.
- The consumer should then begin to pay one consolidated monthly payment to the debt adjuster for all of the consumer’s unsecured debt. The debt adjuster then distributes the payment to each of the consumer’s creditors within 30 days of receipt of the consumer’s funds.
- The debt adjuster’s fees for performing these services are restricted by the GDAA to 7.5% of the amount distributed monthly to the consumer’s creditors. For example, if the consumer pays $100.00 each month into the DMP, then the fee that the debt adjuster can receive can only be $6.97, leaving $93.03 for distribution to the consumer’s creditors.
- The formula is: Total Amount Paid to DMP ÷ 1.075 = Amount to Be Distributed to Creditors.
In addition, this law requires that:
- A separate trust account is maintained for your funds, along with certain insurance coverage, and audited annually.
- Copies of these audits and insurance policies are filed annually with the Governor’s Office of Consumer Affairs.
Debt Adjusters Frequently Violate the Georgia Debt Adjustment Act
In our experience, debt adjusters frequently violate the Debt Adjustment Act in the following ways:
- Charging more than 7.5% of the amount distributed monthly to creditors for debt adjusting services;
- Failing to distribute the consumer’s funds to his creditors within 30 days of receipt of the funds.
You, the consumer, also have the right to file a private legal action against a debt adjustment company that has overcharged you or mishandled your account in violation of the Act’s provisions. Not only is the company obligated to refund all fees, charges or contributions you have paid, but through this action, you may seek an additional restitution of $5,000.00.
If you have done business with a debt adjuster, give us a call today! You may be entitled to recover money for the violation of the Georgia Debt Adjustment Act.