COMPANY SELLING SURETY BONDS TO RENTERS CHARGED WITH VIOLATING CONSUMER PROTECTION ACT

Attorney General J. Joseph Curran, Jr. announced today that his office’s Consumer Protection Division has charged Converge Services Group, L.L.C. (doing business as “SureDeposit”), of 14 Main Street, Madison, N.J. and its owners, Stuart Litwin and Daniel Rudd, with unfair and deceptive trade practices in connection with their selling surety bonds to Maryland renters.

The Maryland Security Deposit Law permits landlords to collect refundable security deposits from their tenants. Landlords may deduct amounts for damage to the premises in excess of ordinary wear and tear that occur during the tenancy, as well as actual damages due to breach of lease and unpaid rent. SureDeposit, through several Maryland landlords, charged tenants $175 or more for surety bonds designed to protect the rental property against the same damages for which security deposits are normally collected. The Division alleges that SureDeposit violated the Consumer Protection Act because the premiums collected by SureDeposit for its surety bonds were nonrefundable and because the tenants who purchased the surety bonds were not advised of the rights and protections to which they would ordinarily be entitled under the Security Deposit Law. The Division also alleges that SureDeposit did not adequately disclose to consumers who purchased its surety bonds that they would remain liable for damages to the rental premises.

“ When a landlord or any other business collects payments from tenants to protect a rental property, it must comply with the Security Deposit Law and advise consumers of their rights under that statute,” said Curran.

The Attorney General’s Consumer Protection Division has requested an order requiring SureDeposit to cease selling its surety bonds to Maryland consumers and pay restitution to consumers. Additionally, the Consumer Protection Division is seeking to have SureDeposit pay its investigation costs and a civil penalty for each of SureDeposit’s violations of law.

A public hearing on the charges is scheduled for Tuesday, April 27, 2004 at 9:30 a.m. at the Office of Administrative Hearings, 11101 Gilroy Road in Hunt Valley, Maryland. Consumers who wish to contact the Consumer Protection Division may call (410) 576-6569.

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