Winter Capriola
Zenner LLC’s
(“WCZ”) commercial litigation attorneys, Richard J. Capriola and David B.
Weinberg secured a significant victory on behalf of long-time client, DebtXS,
in defense of a class action lawsuit alleging DebtXS violated the Georgia Debt
Adjustment Act (O.C.G.A § 18-5-1, et.
seq.). Superior Court Judge Linda
Warren Hunter, entered an Order enforcing an arbitration provision in the debt
settlement consumer’s agreement. Despite
the complaining parties’ reliance on several prior court decisions refusing to
enforce almost identical arbitration provisions, Atlanta based WCZ adapted
recent developments in national and state arbitration law to secure the win. In response to the order compelling
arbitration, the plaintiff dismissed his case and did not file an arbitration.
“We
are most pleased with the Court’s well-reasoned ruling in this matter. The law is clearly on our side on this one
and was expertly articulated by Rich and David,” said Douglas K. Williams,
in-house counsel for DebtXS.
Debt
Settlement companies have been under attack since Georgia revised its laws in
2003 to provide consumers the ability to obtain the return of all fees, charges or contributions paid by the
consumer plus a $5,000.00 penalty if they can prove a violation of the law. Georgia’s Debt Adjustment Act is one of the
strictest in the nation, providing a cap on the fees debt settlement companies
can charge and requiring trust funds, annual audits, state reporting and liability
insurance. Plaintiff’s attorneys have seized
on the statute’s rigid requirements and hefty statutory penalty and continue to
file aggressive class actions at a relentless pace.
Any
company providing debt settlement, debt management or debt negotiation
services, including companies providing support services, such as payment
processing and account management, should consult with legal counsel to ensure
they comply with Georgia’s strict laws. Likewise,
service agreements should be well crafted to protect settlement and servicing
companies in the event they are sued.
