Two Pompano Beach firms promising to consolidate debt and repair tarnished credit have been sued by Florida law enforcement officials who charge the companies with failing to provide those services.
Florida Attorney General Richard Doran filed a civil complaint in Broward County Circuit Court last week against Gibson Trust and Goldstar Financial Services and three officials of the firms. Shortly before the state took action, Gibson Trust filed for bankruptcy.
The lawsuit names top officials with the companies: Patrick O'Toole and his wife, Donna Canty O'Toole, both of Broward County, as well as Martha Allen, a Georgia resident and director.
Officials from Gibson Trust and Goldstar Financial Services could not be reached for comment.
The state is seeking restitution and civil penalties of up to $15,000 per violation of the state's Deceptive and Unfair Trade Pratices Act. The attorney general received 177 complaints about the debt consolidation firms from consumers around the country. Florida officials will pursue litigation even though Gibson Trust has filed to liquidate under Chapter 7 bankruptcy provisions. A meeting of creditors is scheduled for late December.
The Better Business Bureau of Southeast Florida received 500 complaints about the two companies during the past 12 months, said Brodie White, president of the consumer watchdog group.
The companies promoted themselves on the Internet, offering debt consolidation, credit counseling and credit repair. Consumers were required to send payments to one of the debt management firms, which in turn would pay people's creditors.
The companies asked for an initial payment that consumers thought would go to creditors. But that didn't happen, the lawsuit said, and consumers kept accruing late fees and receiving calls from debt collectors.
Because company representatives told customers there had been a foul-up on the creditor's part that would eventually be cleared, a substantial number of consumers continued sending payments to Gibson or Goldstar for months, White said.
In numerous instances, payments weren't made, miring people even deeper in debt, with some customers having to file for bankruptcy protection as a result, the lawsuit said.
'We will vigorously try to find the money trails and get as much money back for consumers as possible. But there are no guarantees, ' said Florida Assistant Attorney General Marta Moakley. She suggested that consumers attempt on their own to get their credit in order.
People with questions can call the attorney general's Fort Lauderdale office, 954-712-4600.
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