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Goddard Announces $4.5 Million Settlement over Deceptive Credit Counseling

(Phoenix, Ariz. - Nov. 4, 2010) Attorney General Terry Goddard today announced that he, along with 19 other Attorneys General, has entered into a $4.5 million agreement with Maryland-based AscendOne Corporation over allegedly deceptive credit counseling services provided to consumers.

In a complaint filed today in Maricopa County Superior Court, the Attorneys General alleged that AscendOne, working with a large number of non-profit credit counseling agencies, offered, sold and performed debt management services without first obtaining the required license. The complaint further alleged that AscendOne misled consumers by representing that the debt management services it offered would be performed by a non-profit credit counseling agency when, in fact, AscendOne performed the services, and that customers would receive credit counseling when, in fact, many consumers had little or no contact with a credit counselor. The companies and their owner did not admit any wrongdoing, but nonetheless agreed to the relief provided in the consent judgment.

The Complaint names AscendOne, the parent corporation, along with its wholly-owned subsidiaries Amerix Corporation, CareOne Services, Inc., FreedomPoint Financial Corporation and 3C, Inc., and Bernaldo Dancel, the owner of the companies.

A consent judgment, which will be filed in Maricopa County Superior Court, prohibits AscendOne and its owner from offering, selling or performing debt management services unless they comply with all state law requirements, including becoming licensed. The judgment also prohibits the companies from misrepresenting themselves as a non-profit corporation and requires them to disclose the purpose of the fees they charge and the potential impact of their services on a consumers’ credit history. Finally, the judgment provides that AscendOne and Dancel cannot enroll consumers into debt management plans unless they first determine that the consumers can afford the plan and provide them with meaningful credit counseling.

The Attorneys General of Arkansas, California, Delaware, District of Columbia, Idaho, Indiana, Maryland, Massachusetts, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Washington and West Virginia also participated in the settlement.

A copy of the consent judgment is attached. For more information, please contact Steve Wilson at (602) 542-8351.