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* * * * * * * * * * * * * * * * * * * * * IN THE MATTER OF: WORLD LAW DEBT, INC. WORLD LAW PROCESSING ORION PROCESSING, LLC (Collectively, "Respondents")
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TEMPORARY ORDER TO ORDER TO MAKE RESTITUTION NOTICE OF INTENT TO ISSUE AND NOTICE OF RIGHT TO HEARING |
I. LEGAL AUTHORITY AND JURISDICTION
The Banking Commissioner (“Commissioner”) is charged with the administration of Sections 36a 671 to 36a-671e, inclusive, of the Connecticut General Statutes contained in Part II of Chapter 669 of the Connecticut General Statutes, “Debt Adjusters and Debt Negotiation”.
Pursuant to the authority granted by Section 36a-17(a) of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division of the Department of Banking, has investigated the activities of Respondents to determine if they have violated, are violating or are about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner.
Section 36a-17(a) of the Connecticut General Statutes provides, in pertinent part, that:
The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 and the Freedom of Information Act, as defined in section 1-200; (1) make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner, (2) require or permit any person to testify, produce a record or file a statement in writing, under oath, or otherwise as the commissioner determines, as to all the facts and circumstances concerning the matter to be investigated or about which an action or proceeding is pending . . . .
Section 36a-52 of the Connecticut General Statutes provides, in pertinent part, that:
(a) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending. Any such notice shall include: (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes . . . alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice, unless the person fails to appear at the hearing. After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice. If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person. No such order shall be issued except in accordance with the provisions of chapter 54.
(b) If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section. Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.
Section 36a-50 of the Connecticut General Statutes provides, in pertinent part, that:
(a)(1) Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending. Any such notice shall include: (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes . . . alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted not later than fourteen days after receipt of the notice.
(2) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing. After the hearing, if the commissioner finds that the person has violated any such provision, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person. If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.
(3) Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54. . . .
(c) Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may, in addition to any other remedy authorized by law, order such person to (1) make restitution of any sums shown to have been obtained in violation of any such provision . . . plus interest at the legal rate set forth in section 37-1 . . . . After the commissioner issues such an order, the person named in the order may, not later than fourteen days after receipt of such order, file a written request for a hearing. The order shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending. Any such hearing shall be held in accordance with the provisions of chapter 54.
II. MATTERS ASSERTED
| 1. | WLD is a purported corporation and division of World Law Group with offices at 2201 Donley Drive, Suite 250, Austin, Texas, and 7668 Warren Parkway, Suite 325, Frisco, Texas. |
| 2. | WLP is a purported division of WLD with mailing addresses at P.O. Box 82641 Austin, Texas, and 7668 Warren Parkway, Suite 315, Frisco, Texas. |
| 3. | Orion Processing is a purported limited liability company with an office at 2201 Donley Drive, Suite 250, Austin, Texas. |
| 4. | On May 14, 2012, a Connecticut resident entered into a “Customer Enrollment Package” (“Agreement”) with WLD, and indirectly WLP, in which the Connecticut resident engaged the services of WLD and WLP in connection with negotiating a possible mitigation of such Connecticut resident’s unsecured debt. |
| 5. | In connection with the Agreement, total payment of $350 via ACH was processed from the account of the Connecticut resident referred to in paragraph 4 above, and held in an account established by Orion Processing with a third-party (“Third Party”). The total payment of $350 is in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees established by the Commissioner on or about October 1, 2009 (“Schedule of Maximum Fees”). |
| 6. | On January 9, 2013, counsel for Third Party provided an agreement in response to the Division’s request for all agreements between WLD and Third Party. Such agreement was between Third Party and Orion Processing. |
| 7. | The Schedule of Maximum Fees provides, in pertinent part, that “[a] debt negotiator of unsecured debt may charge the debtor a reasonable one-time initial or set-up fee in an amount not to exceed fifty dollars ($50). . . . A debt negotiator of unsecured debt may collect total aggregate fees including the initial fee and service fees, not to exceed ten percent (10%) of the amount by which the consumer’s debt is reduced as part of each settlement as agreed to in the debt negotiation service contract as each settlement is achieved”. |
| 8. | On June 19. 2012, a second Connecticut resident entered into a "Client Service Agreement" ("Client Service Agreement") with WLD, and indirectly WLP, in which the Connecticut resident engaged the services of WLD and WLP in connection with negotiating a possible mitigation of such Connecticut resident's unsecured debt. |
| 9. | In connection with the Client Service Agreement, total payment of $2,961.27 was paid to and held in an account established with Third Party by the Connecticut resident referred to in paragraph 7 above, which amount is in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees. |
| 10. | From at least July 20, 2010 to December 17, 2012, Respondents engaged in debt negotiation of unsecured debt on behalf of Connecticut residents and were paid at least $275,931.26 for such debt negotiation services. |
| 11. | At no time relevant hereto have Respondents been licensed to engage in debt negotiation in this state, nor do Respondents qualify for an exemption from such licensure. |
| 12. | On June 26, 2012, the Commissioner received a complaint filed by the Connecticut resident referred to in paragraph 4 above, concerning Respondents’ failure to perform or successfully complete the services specified in the Agreement. |
| 13. | On September 20, 2012, the Commissioner received a complaint filed by the Connecticut resident referred to in paragraph 7 above, concerning Respondents’ failure to perform or successfully complete the services specified in the Client Service Agreement. |
III. STATUTORY BASIS FOR ORDER TO CEASE
AND DESIST AND IMPOSITION OF CIVIL PENALTY
Section 36a-671(a) of the Connecticut General Statutes provides, in pertinent part, that:
(a) As used in this section and sections 36a-671a to 36a-671d, inclusive, (1) “debt negotiation” means, for or with the expectation of a fee, commission or other valuable consideration, assisting a debtor in negotiating or attempting to negotiate on behalf of a debtor the terms of a debtor’s obligations with one or more mortgagees or creditors of the debtor; . . . (2) “debtor” means any individual who has incurred indebtedness or owes a debt for personal, family or household purposes . . . .
Section 36a-671(b) of the Connecticut General Statutes provides, in pertinent part, that:
No person shall engage or offer to engage in debt negotiation in this state without a license issued under this section for each location where debt negotiation will be conducted. . . . A person is engaging in debt negotiation in this state if such person: . . . (2) has a place of business located outside of this state and the debtor is a resident of this state who negotiates or agrees to the terms of the services in person, by mail, by telephone or via the Internet . . . .
Section 36a-671a(b) of the Connecticut General Statutes provides, in pertinent part, that:
Whenever it appears to the commissioner that any person has violated, is violating or is about to violate the provisions of sections 36a-671 to 36a 671e, inclusive, . . . the commissioner may take action against such person . . . in accordance with sections 36a-50 and 36a-52. For purposes of sections 36a-671 to 36a-671e, inclusive, each engagement and each offer to engage in debt negotiation shall constitute a separate violation.
WLD’s engaging in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 1 and 4 through 13, inclusive, of the Matters Asserted, constitutes violations of Section 36a-671(b) of the Connecticut General Statutes. Such violations form the basis to issue an order to cease and desist against WLD pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes, issue an order to make restitution against WLD pursuant to Sections 36a-671a(b) and 36a-50(c) of the Connecticut General Statutes and impose a civil penalty upon WLD pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes. Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon WLD in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
WLP’s engaging in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 2 and 4 through 13, inclusive, of the Matters Asserted, constitutes violations of Section 36a-671(b) of the Connecticut General Statutes. Such violations form the basis to issue an order to cease and desist against WLP pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes, issue an order to make restitution against WLP pursuant to Sections 36a-671a(b) and 36a-50(c) of the Connecticut General Statutes and impose a civil penalty upon WLP pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes. Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon WLP in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
Orion Processing’s engaging in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 3 through 13, inclusive, of the Matters Asserted, constitutes violations of Section 36a-671(b) of the Connecticut General Statutes. Such violations form the basis to issue an order to cease and desist against Orion Processing pursuant to Sections 36a-671a(b) and 36a 52(a) of the Connecticut General Statutes, issue an order to make restitution Orion Processing pursuant to Sections 36a-671a(b) and 36a-50(c) of the Connecticut General Statutes and impose a civil penalty upon Orion Processing pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes. Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Orion Processing in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
IV. FINDING AND STATUTORY BASIS FOR
TEMPORARY ORDER TO CEASE AND DESIST
The Commissioner finds that public welfare requires immediate action to issue a temporary order requiring Respondents to cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, and to take such action as set forth herein to effectuate the purposes of Section 36a-52(b) of the Connecticut General Statutes in that the interests of Connecticut residents are being materially prejudiced by Respondents’ engaging in debt negotiation in Connecticut while not being duly licensed and Respondents’ receiving monies in excess of the Schedule of Maximum Fees from Connecticut residents who are already struggling financially.
V. TEMPORARY ORDER TO CEASE AND DESIST, ORDER TO MAKE RESTITUTION,
NOTICE OF INTENT TO ISSUE ORDER TO CEASE AND DESIST,
NOTICE OF INTENT TO IMPOSE CIVIL PENALTY
AND NOTICE OF RIGHT TO HEARING
AND WHEREAS, the Commissioner has made the finding required under Section 36a-52(b) of the Connecticut General Statutes.
THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that WLD immediately CEASE AND DESIST from violating Section 36a 671(b) of the Connecticut General Statutes. This Temporary Order shall become effective upon receipt by WLD, and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order.
THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that WLP immediately CEASE AND DESIST from violating Section 36a 671(b) of the Connecticut General Statutes. This Temporary Order shall become effective upon receipt by WLP, and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order.
THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that Orion Processing immediately CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes. This Temporary Order shall become effective upon receipt by Orion Processing, and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order.
THE COMMISSIONER FURTHER ORDERS, pursuant to Sections 36a-17 and 36a-52(b) of the Connecticut General Statutes, that: Not later than fourteen (14) days from receipt of this Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing, World Law Debt, Inc. and World Law Processing shall provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov, a list of all Connecticut residents with whom World Law Debt, Inc. and World Law Processing have entered into agreements for debt negotiation services on and after October 1, 2009. Such submission shall include: (a) a copy of each agreement, and (b) a list of each debtor’s name and address and full itemization of each debtor’s payments made pursuant to the agreement, specifying the dates, amounts and to whom such payments were made.
THE COMMISSIONER FURTHER ORDERS, pursuant to Section 36a-50(c) of the Connecticut General Statutes that World Law Debt, Inc., World Law Processing and Orion Processing, LLC MAKE RESTITUTION of any sums obtained as a result of World Law Debt, Inc., World Law Processing and Orion Processing, LLC violating Section 36a-671(b) of the Connecticut General Statutes, plus interest at the legal rate set forth in Section 37-1 of the Connecticut General Statutes. Specifically, the Commissioner ORDERS that: Not later than thirty (30) days from the date this Order to Make Restitution becomes permanent, World Law Debt, Inc., World Law Processing and Orion Processing, LLC shall:
| 1. | Repay each Connecticut resident in the amounts identified in Exhibit A plus interest and repay to any other Connecticut resident who entered into an agreement for debt negotiation services with World Law Debt, Inc. or World Law Processing on and after October 1, 2009, any fees paid by such Connecticut resident to World Law Debt, Inc., World Law Processing and/or Orion Processing, LLC in connection with such agreements plus interest. Payments shall be made by cashier’s check, certified check or money order; and |
| 2. | Provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov, evidence of such repayments. |
NOW THEREFORE, notice is hereby given to Respondents that the Commissioner intends to issue an order requiring each Respondent to CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, and impose a CIVIL PENALTY upon each Respondent as set forth herein, subject to each Respondent’s right to a hearing on the allegations set forth above.
A hearing will be granted to each Respondent if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103 1800 within fourteen (14) days following each Respondent’s receipt of this Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Section 36a-52(a) and subsections (a) and (c) of Section 36a-50 of the Connecticut General Statutes. This Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If any Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”. Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a hearing officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies. If a hearing is requested, the hearing will be held on October 1, 2013, 2013, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondents fail to appear at the requested hearing. At such hearing, each Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
If WLD does not request a hearing within the time period prescribed or fails to appear at any hearing, the Order to Make Restitution shall remain in effect and become permanent against WLD, and the Commissioner will issue an order that WLD cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon WLD.
If WLP does not request a hearing within the time period prescribed or fails to appear at any hearing, the Order to Make Restitution shall remain in effect and become permanent against WLP, and the Commissioner will issue an order that WLP cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon WLP.
If Orion Processing does not request a hearing within the time period prescribed or fails to appear at any hearing, the Order to Make Restitution shall remain in effect and become permanent against Orion Processing, and the Commissioner will issue an order that Orion Processing cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Orion Processing
Dated at Hartford, Connecticut
this 8th day of July 2013. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 9th day of July 2013, the foregoing Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by certified mail, return receipt requested, to World Law Debt, Inc., 2201 Donley Drive, Suite 250, Austin, Texas 78758, certified mail no. 70121010000172645878; World Law Debt, Inc., 3030 North 3rd Street, Phoenix, Arizona 85012, certified mail no. 70121010000172645885; World Law Debt, Inc., 7668 Warren Parkway, Suite 325, Frisco, Texas 75034, certified mail no. 70123050000216929737; World Law Processing, P.O. Box 82641, Austin, Texas 78708, certified mail no. 70121010000172645892; World Law Processing, 7668 Warren Parkway, Suite 315, Frisco, Texas 75034, certified mail no. 70121010000172645915; Orion Processing, LLC, 2201 Donley Drive, Suite 250, Austin, Texas, 78758, certified mail no. 70121010000172645908.
________/s/_________
Doniel Kitt
Prosecuting Attorney