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For Immediate Release
September 19, 2005
Media Contact:
Kevin Enright 410-576-6357


Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division has entered into a settlement with Michael Kiefer, the former Chief Operations Officer of DebtWorks, Inc., of Germantown, Md. DebtWorks, which is no longer operating, was a for-profit corporation that provided services in connection with debt management plans. Under a debt management plan, a consumer makes monthly payments to a credit counseling agency that distributes the payments to the consumer’s creditors. In Maryland, only a nonprofit corporation can offer and perform debt management plan services.

The Division alleged that Kiefer, as the Chief Operations Officer of DebtWorks, was responsible for Debtworks’ unfair and deceptive trade practices, including that DebtWorks did not act as a mere "processor" for credit counseling agencies but, in fact, actually performed debt management plan services that it could not legally perform as for-profit company, and accepting fees for those services that it could not legally accept. The Division also alleged that Kiefer, as DebtWorks’ Chief Operations Officer, was responsible for DebtWorks’ misrepresentations concerning the nature of the debt management plans it sold to consumers, including representing that enrolling in a debt management plan would only help consumers’ credit when, in fact, enrolling in a debt management plan can hurt a consumer’s ability to obtain credit. DebtWorks is now defunct and its owner, Andris Pukke, has been sued by the Federal Trade Commission and is being pursued by the Internal Revenue Service for more than $300 million in taxes and penalties.

Kiefer denied that he violated the law but agreed to settle the matter. Under the settlement, Kiefer agreed to pay the Division $220,000, which will be used to pay restitution to consumers harmed by Debtwork’s practices. Kiefer also agreed to pay the Division $15,000 for its costs. The settlement also contained an injunction that bars Kiefer from performing debt management services for five years and limits the credit counseling services he may provide to consumers.

" I am pleased my Office has obtained further relief for consumers," Attorney General Curran said. "Before agreeing to a debt management plan, consumers should compare the fees they are asked to pay with those charged by other credit counseling agencies and they should also be wary of agencies that pressure them into enrolling in debt management plans without explaining all of the available options."

Consumers eligible for restitution under the settlement will be contacted by the Consumer Protection Division.




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