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For Immediate Release

Media Contact:
Raquel Guillory, 410-576-6357

Attorney General Settles with Companies Selling Debt
Repayment Services

BALTIMORE, MD (October 19, 2007) - Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has reached a settlement with Frederick attorney Richard Brennan, the Law Offices of Richard A. Brennan, LLC, the law firm’s office manager, Jeffrey Formulak, and a related company called American Telecommunications Solutions, LLC (referred to collectively as the “Brennan Law Firm”), in connection with their offer and sale of debt management and debt settlement services to consumers.

The Brennan Law Firm sold services to consumers through which they agreed to place consumers’ payments into an escrow account and either forward the money to consumers’ creditors each month through a “debt management plan,” or hold the money until enough was saved to negotiate a lump sum settlement through a “debt settlement plan.” The Division alleged that The Brennan Law Firm failed to forward consumers’ payments to their creditors, including approximately $240,000 of consumers’ payments that were used by the firm to pay its own debts.

The Division also alleged that the Brennan Law Firm violated the Maryland Debt Management Services Act which requires an entity providing debt management services in Maryland to be a non-profit corporation licensed by the Department of Financial Regulation. The Brennan Law Firm is a for-profit corporation and did not possess a license to offer and sell debt management services. The Division also alleged that the Brennan Law Firm misrepresented the experience of its staff and misrepresented the amounts consumers would save through its debt settlement services.

“Consumers who are struggling with debt need to receive meaningful counseling services, not unfulfilled promises,” said Attorney General Gansler. The Attorney General advised consumers to be wary of any company that promises a quick fix for repaying their debt.

Under the settlement, the Brennan Law Firm can no longer offer and sell debt management services and may only sell debt settlement services if it posts a surety bond with the Division, complies with the disclosures and restrictions imposed by the agreement, and pays full refunds to consumers who purchase the services but do not realize promised savings. The Brennan Law Firm also agreed to return all payments it received from consumers in the past that were not forwarded to their creditors, as well as pay costs and a civil penalty. In making today’s announcement, Attorney General Gansler thanked Assistant Attorney General Phil Ziperman for his work on the case.


Attorney General of Maryland 1 (888) 743-0023 toll-free / TDD: (410) 576-6372
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