ORDERS:
ORDER
STATEMENT
OF THE CASE
On
October 12, 2007, Petitioner South Carolina Department of Consumer Affairs
(“Department”) filed a Petition with this court seeking, among other relief, an
Order from this court requiring Respondent Benny Reyes a/k/a Ben Reyes d/b/a
Credit Solutions and Associates (“Respondent”) to cease and desist from
engaging in consumer credit counseling services in South Carolina in violation
of the Consumer Credit Counseling Act (“Act”), S.C. Code Ann. § 37-7-101 et
seq. (Supp. 2007). By an Order for Answer dated November 14, 2007, this
Court required Respondent to file an Answer to the Department’s Petition by
December 14, 2007. On December 18, 2007, this Court granted Respondent’s
request of the same date to extend the deadline for filing an Answer to January
11, 2008. After not receiving an Answer from Respondent, this Court issued an
Order Requiring Answer to be Filed dated March 4, 2008, requiring Respondent
file an Answer with this Court by March 12, 2008. The Order further provided
that, if Respondent failed to file an Answer as required by the Order,
Respondent may be deemed to be in default resulting in this matter being
disposed of adversely to Respondent’s interests pursuant to ALC Rule 23.
Respondent failed to file an Answer to the Department’s Petition, thus by an
Order for Entry of Default dated March 17, 2008, this Court entered default
against Respondent.
DISCUSSION
Under
the Act, a person is required to obtain a license from the Department prior to
engaging in consumer credit counseling services, which include, among other
activities, “improving or offering to improve a consumer’s credit record,
history, or rating.” S.C. Code Ann. §§ 37-7-101(3)(b) (Supp. 2007) (defining
“credit counseling services”), 37-7-102 (Supp. 2007) (providing that “[a]
person may not engage in credit counseling services in South Carolina . . .
unless the person obtains from the [D]epartment a license pursuant to this
chapter”). S.C. Code Ann. § 37-7-101(2) provides that “the business of credit
counseling is conducted in this state if the credit counseling organization,
its employees, or its agents are located in this State or if a credit
counseling organization solicits or contracts with debtors located in this
State.” The Act also prescribes the fees that may be charged by credit
counseling organizations. S.C. Code Ann. § 37-7-112 (2005) provides that “[a]
licensee may not charge a consumer a fee except as established by the
department by regulation.” Regulation 28-700(B)(1)(2006) sets forth the fees a
credit counseling organization may charge:
(1) A licensee may
not charge or receive from a consumer, directly or indirectly, a fee except the
following:
(a)
an initial consultation fee, not to exceed fifty dollars for each consumer;
* * *
(c)
additional maintenance fees, not to exceed forty dollars for each month;
(d) a reinstatement fee,
not to exceed twenty-five dollars.
In
its Petition, the Department contends that Respondent has offered, and
continues to offer, credit counseling services described in § 37-7-101(3)(b) to
South Carolina consumers without the license required by the Act. See Department’s Petition, ¶¶ 4, 12, 13. Further, the Department asserts that
Respondent has charged fees for credit counseling services in excess of those
allowed by the Act. See Department’s Petition, ¶ 14. Because
Respondent failed to respond to the Department’s Petition as required by this court’s
Order, these allegations are therefore deemed admitted pursuant to ALC Rule
18(B).
Based
upon these violations of the Act, and pursuant to S.C. Code Ann. § 37-7-108
(2005), the Department requested that this Court issue an Order:
(1)
requiring Respondent to cease and desist from offering or engaging in credit
counseling services in violation of the Act;
(2)
requiring Respondent to refund all monies collected under contracts entered
into with South Carolina consumers after December 1, 2005;
(3)
assessing an administrative fine of five hundred dollars against Respondent for
each violation of the Act;
(4)
restraining Respondent from further violations of the Act;
(5)
that this Order take effect immediately; and
(6)
granting such other relief as may be necessary, just, and appropriate.
See Department’s Petition at 3.
Because
Respondent failed to respond to this court’s Order requiring it to answer the
Department’s Petition and has otherwise failed to defend a position in this
case, Respondent is in default in this matter. See ALC Rule 23(A) (“A
default occurs when a party fails to plead or otherwise prosecute or defend,
fails to appear at a hearing without the proper consent of the judge or
fails to comply with any interlocutory order of the administrative law
judge.”) (emphasis added). Therefore, this case has been disposed of adversely
to Respondent’s interests. See ALC Rule 23(A) (“The administrative law
judge may dismiss a contested case or dispose of a contested case adverse to
the defaulting party.”).
ORDER
For
the reasons stated above, the Department is entitled to a judgment in its favor
in this matter based upon Respondent’s default. Therefore, it is hereby
ORDERED that Respondent Benny Reyes a/k/a Ben Reyes d/b/a Credit Solutions and
Associates, and his agents or assigns, SHALL CEASE AND DESIST from
offering consumer credit counseling services to, or engaging in consumer credit
counseling services with, South Carolina consumers unless and until it receives
a license from the Department to provide such services and is otherwise
operating in compliance with the Act; and it is further
ORDERED that Respondent Benny Reyes a/k/a Ben Reyes d/b/a Credit Solutions and
Associates, and his agents or assigns, within sixty (60) days of the date of
this Order, SHALL REFUND all monies collected under contracts entered
into with South Carolina consumers after December 1, 2005, and SHALL PROVIDE a listing and proof of such to the Department within sixty (60) days of the
date of this Order; and it is further
ORDERED that Respondent Benny Reyes a/k/a Ben Reyes d/b/a Credit Solutions and
Associates, and his agents or assigns, SHALL PROVIDE the Department,
within sixty (60) days of the date of this Order, with copies of all contracts
entered into with South Carolina consumers after December 1, 2005; and it is
further
ORDERED that the Department may impose fines, pursuant to S.C. Code Ann. § 37-7-119(C),
upon Respondent Benny Reyes a/k/a Ben Reyes d/b/a Credit Solutions and
Associates, and his agents or assigns, based upon the review of Respondent’s
contracts.
IT
IS SO ORDERED.
___________________________________
Paige J. Gossett
Administrative
Law Judge
March 25, 2008
Columbia, South Carolina
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