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Ohio Sues "Credit Counselor" For Deceiving, Threatening Consumers

Debt Freedom Foundation Took Money, Provided No Services, Suit Charges

July 12, 2006

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Ohio has filed suit against a Columbus man on charges of deceiving and bullying area consumers into paying him thousands of dollars for credit counseling services he didn't perform and isn't authorized to sell in Ohio, violating several sections of Ohio's consumer protection law.

Attorney General Mike Petro filed the lawsuit in Franklin County Common Pleas Court against Robert E. Haines, who also does business under the name Debt Freedom Foundation, alleging numerous violations of the state's Consumer Sales Practices Act and Credit Services Organization Act. Haines rebuffed attempts by the Attorney General's Office to mediate complaints the office received about his company, Petro said.

"This man dishonestly held himself out as a credit counseling services organization that helps people get out of debt," Petro said. "In fact, it was a ruse to convince unsuspecting homeowners to refinance their homes and give him a portion of the borrowed money. Mr. Haines preyed on good people's trusting nature, and our action in court will bring him to account for that."

Petro said his investigators found that the typical counsel Haines gave to financially overextended customers was to borrow money against the equity in their homes and use the funds to pay their other debts, plus Haines' fee. When prospective customers balked at his advice, Haines allegedly bullied them to pay him even when he provided no service, the investigators found.

According to the suit, Haines violated state law and rule by charging for services not performed; obtaining credit reporting agency reports on customers without their permission; misrepresenting his fees; threatening customers and refusing to return their personal documents; not providing his customers a statement of their rights as credit-services buyers.

He is also accused of failing to execute properly worded contracts that included clearly written terms and conditions, as well as customers' right to cancel in three days; offering money to customers for business referrals; not obtaining a required surety bond before doing business in Ohio; not registering with the state Division of Financial Institutions as a credit services organization; and not registering with the Ohio Secretary of State.

Petro asked the court for an injunction against Haines, fines of $25,000 per violation, and financial repayment to consumers who lost money to Haines.

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