ORDERS:
ORDER GRANTING PETITION FOR INJUNCTIVE RELIEF
STATEMENT
OF THE CASE
On
July 21, 2006, Petitioner South Carolina Department of Consumer Affairs
(Department) filed a Petition with this Court seeking, among other relief, an
Order from this Court enjoining Respondent Rescue Debt, Inc. (Respondent) from
further engaging in consumer credit counseling services in South Carolina in
violation of the Consumer Credit Counseling Act. By an Order to Answer
Petition for Injunctive Relief dated August 17, 2006, this Court required
Respondent to file an Answer to the Department’s Petition within twenty (20)
days of the date of the Order. The Order further provided that, if Respondent
failed to file an Answer as required by the Order, Respondent would be deemed
to be in default and would have this matter disposed of adversely to its
interests pursuant to ALC Rule 23. To date, however, Respondent has not filed
an Answer to the Department’s Petition, or otherwise responded to this Court’s
Order. Accordingly, on September 19, 2006, the Department filed a Motion for
Default Judgment, requesting that the Court terminate this case adversely to
Respondent and grant the relief sought in the Department’s Petition. For the
reasons set forth below, the Department’s motion is hereby granted.
DISCUSSION
Under
the South Carolina Consumer Credit Counseling 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. 2005) (defining “credit counseling services”), 37-7-102
(Supp. 2005) (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”). In its Petition for
injunctive relief, the Department contends that Respondent has offered, and
continues to offer, the credit counseling services described in Section
37-7-101(3)(b) to South Carolina consumers without the license required by the
Consumer Credit Counseling Act. See Department’s Petition, ¶¶ 5, 9,
10. 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 Consumer Credit Counseling Act, the
Department filed a Petition for injunctive relief with this Court pursuant to
S.C. Code Ann. § 37-6-110 (2002) and S.C. Code Ann. § 1-23-600(E) (enacted by
Act No. 387, § 4, 2006 S.C. Acts ___, ___). Specifically, in its Petition, 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 provide the
Department with copies of all contracts it entered into with South Carolina
consumers after December 1, 2005;
(3) requiring Respondent to refund all monies
collected under contracts entered into with South Carolina consumers after
December 1, 2005;
(4) assessing an administrative fine of five
hundred dollars against Respondent for each violation of the Act;
(5) restraining Respondent from further
violations of the Act; and,
(6) granting such other relief as may be
necessary, just, and appropriate.
See Department’s Petition at 2-3. 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 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, the Department’s Motion for a Default Judgment is hereby granted and
this matter will be disposed of adversely to Respondent’s interests. See ALC Rule 23 (“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:
(1) Respondent
Rescue Debt, Inc., and its 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 South Carolina Consumer Credit
Counseling Act; and,
(2) Respondent
Rescue Debt, Inc., and its 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, at or through its office at 1011 Brioso Drive, Suite 101, Costa Mesa,
California, or at or through any other locations.
While
the Department also requested that Respondent be required to refund certain
monies to South Carolina consumers and be assessed administrative fines for its
violations of the Consumer Credit Counseling Act, I find that these remedies
would be more appropriately imposed by the Department after it has had the
opportunity, based upon its review of Respondent’s contracts, to more precisely
determine the amount of funds to be refunded and the number of violations of
the Act to be sanctioned with fines. Therefore, I decline to order those two
requests for relief at this time.
AND
IT IS SO ORDERED.
______________________________
JOHN D.
GEATHERS
Administrative
Law Judge
October 9, 2006
Columbia, South Carolina |
