Credit Counseling and Debt Services

Five years from now, credit counseling and debt relief services will be vastly different from today's services. Getting from here to there will be no easy task. Of critical importance will be keeping abreast of the ever-changing body of federal and state rules, regulations, and laws, and anticipating legal and regulatory trends. Venable takes a positive and comprehensive approach to every aspect of this legal problem solving. We are fully committed, accessible, versatile, and willing to work harder for you.

Growth industries, such as credit counseling and debt relief services, attract the attention of federal and state lawmakers, federal and state regulatory agencies, state attorneys general, and class action plaintiffs' lawyers. Credit counseling agencies, debt relief services companies, and their related marketers, processors, and service providers require a high level of sophisticated, nuanced legal representation to successfully navigate and comply with the ever-changing, complex regulatory schemes that govern these industries and that can be filled with costly pitfalls at every turn.

Experience in All Aspects of Your Business

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Our Capabilities Are Broad and Deep

Venable has the largest concentration of lawyers, and represents the most clients, in the credit counseling and debt services industries. Our capabilities are broad and deep, and combine the skills of more than 15 attorneys with extensive experience representing numerous companies in these industries. Our legal team covers the gamut of issues—from federal tax-exempt status to state debt-adjusting laws and bankruptcy counseling—from debtor education to banking and financial services regulation—from advertising and marketing to privacy restrictions—and from the unauthorized practice of law to commercial litigation.

We work with both long-established companies and start-up companies that provide credit counseling services, housing counseling, debt management plan services, credit and debt negotiation services, as well as those creating new products and services for consumers in need.

Our Work Principally Involves a Combination of Proactive Counseling and Aggressive Defense

Proactive counseling—To help ensure compliance with the myriad of applicable federal and state laws and regulations, plus assistance and advocacy in helping clients get licensed, registered, or otherwise approved by various regulators.

Aggressive defense against federal and state enforcement actions—Especially actions by the Federal Trade Commission, Internal Revenue Service, state attorneys general, and other state regulators—as well as in private class action litigation.

Providing Proactive Counseling and Advocacy

As legal compliance for credit counseling and debt services companies is a rapidly moving target, Venable devotes considerable time and resources to tracking new developments and keeping our clients up to date on what they need to know. Venable clients are able to stay ahead of the legal curve in order to make sound business and legal decisions.

Our attorneys have met legal and regulatory objectives across the broad spectrum of issues that face credit counseling agencies, debt negotiation companies, and related advertisers and marketers. In addition, we draw on the extensive experience of Venable attorneys nationwide, in everything from advertising and marketing matters to trademark clearance, and from employment law, executive compensation, and employee benefits to real estate leases. In addition, for our nonprofit clients, Venable has one of the largest nonprofit practices in the country. As a result, credit counseling agencies and debt services companies benefit from experienced attorneys who understand their clients' business and issues.

While our attorneys work with clients at all stages, we are most successful and efficient when we become a part of the team in the early stages of an issue. By understanding your business objectives and legal issues, we can recommend effective and efficient courses of action. We factor in real-time intelligence on the complex and dynamic requirements imposed by government regulatory agencies, and we always tailor our recommendations and actions with your larger goals at the forefront.

Our work includes:

  • reviewing marketing materials, such as client contracts, scripts, advertisements, websites and infomercials;
  • assessing, obtaining, and maintaining state law compliance, including debt adjusting licenses, state regulatory examinations, and compliance audits;
  • reviewing products and services for regulatory compliance, including websites, scripts, service level standards, policies and procedures, newsletters, and education and counseling materials; and
  • obtaining and maintaining federal tax exemption status for nonprofit tax-exempt credit counseling agencies. We are currently handling multiple active IRS audits at all stages of the process, from field work to settlement negotiation and appeals.

We have extensive experience navigating a complex patchwork of federal and state law and regulations that include:

  • Consumer Financial Protection Act
  • Credit Repair Organizations Act
  • Fair Debt Collection Practices Act
  • Federal Trade Commission Act
  • Gramm-Leach-Bliley Act
  • State consumer protection laws
  • State credit repair laws
  • State debt adjusting laws including the
  • Uniform Debt-Management Services Act
  • California Check Sellers, Bill Payers and Proraters Law

For our tax-exempt and nonprofit clients, we offer counsel regarding the Internal Revenue Code, state charitable solicitation statutes, and other related governance and operational issues.

When Trouble Strikes, We Vigorously Defend Your Business

In recent matters, we have defended:

  • A credit counseling agency in a breach of contract suit filed in federal court by its marketing and payment-processing service provider
  • A debt negotiation company and its principals in a nonpublic investigation by the Federal Trade Commission
  • A debt negotiation company faced with countless consumer complaints, multiple state regulatory investigations, several state cease and desist orders, and private lawsuits
  • A third-party service provider to debt negotiation companies and their clients that was the subject of a litigated desist and refrain order that alleged violation of the California's Check Sellers, Bill Payers and Proraters Law brought by the California Department of Corporations
  • An individual and marketing partner to a credit counseling agency and other related companies who was prosecuted by the Federal Trade Commission for violation of the Telemarketing Sales Rule by calling consumers on the National Do Not Call Registry and by failing to place consumers' names on in-house do-not-call lists when requested. The FTC also alleged the individuals and their companies misrepresented their businesses and failed to disclose material information to consumers, among other allegations

Venable clients also benefit from our team of former Department of Justice attorneys, former Federal Trade Commission officials, and former deputy attorneys general. Their collective knowledge enables us to represent clients effectively before the IRS, the Federal Trade Commission, and state attorneys general, as well as in private litigation.

Venable's success in class action defense of credit counseling agencies and debt relief services companies deserves special mention. Our attorneys regularly defend against class claims brought in all of the federal districts, as well as in state jurisdictions.

  • We recently negotiated a favorable settlement for a credit counseling agency in a nationwide class action alleging that the company violated the Federal Trade Commission Act and the Credit Repair Organizations Act
  • We recently defended credit counseling agencies and debt settlement companies against lawsuits alleging violations of a variety of federal and state laws (including credit repair statutes) brought against them in both single-plaintiff suits and class actions

The Advantages of Working with Venable

We work hard to keep you ahead of the legal curve. We track new developments and frequently issue alerts that keep clients up to date on what they need to know and act on. We work closely with key federal and state regulators. They are aware of our active involvement within the industry and of our work advocating on behalf of clients, resulting in a high level of respect and visibility that can be extremely beneficial to clients when trouble arises.

We also provide access to Venable's depth of resources and insights gained from our experience in related areas, ensuring that every issue receives the focus required for the most favorable outcome possible.

Practice Focus

  • Advertising and marketing reviews
  • Bankruptcy counseling
  • Class actions and other private lawsuits defense
  • Compliance with federal and state regulations
  • Contracts
  • Formation of credit counseling and debt relief services companies
  • Housing counseling compliance
  • Investigations and enforcement actions by Congressional committees, Federal Trade Commission, State Attorneys General and regulators
  • Mergers, dissolutions and asset transfers
  • Privacy policies
  • Tax exemption status and Internal Revenue Service audits

Government Experience

We have defended clients in regulatory matters, investigations, and enforcement actions before:

  • Alabama Securities Commission
  • Arizona Department of Financial Institutions
  • California Attorney General
  • California Department of Corporations
  • Executive Office for the United States Trustees
  • Florida Attorney General
  • Florida Department of Financial Services
  • Georgia Office of Consumer Affairs
  • Kansas Office of the State Banking Commissioner
  • Maine Attorney General
  • Maryland Attorney General
  • Maryland Division of Financial Regulation
  • Massachusetts Attorney General
  • Mississippi Department of Banking and Consumer Finance
  • Missouri Attorney General
  • Nevada Consumer Affairs Division
  • Nevada Division of Financial Institutions
  • New Hampshire Banking Department
  • New Jersey Department of Banking and Insurance
  • Oregon Division of Finance & Corporate Securities
  • Pennsylvania Attorney General
  • South Carolina Department of Consumer Affairs
  • Texas Office of the Consumer Credit Commissioner
  • Virginia Bureau of Financial Institutions
  • West Virginia Attorney General
  • Wisconsin Department of Financial Institutions

and other agencies