Debt-ridden consumers who trusted Equity First Credit Foundation to take money from their bank accounts and pay their bills as part of a debt management program could lose "substantial amounts of money" — possibly even hundreds of thousands of dollars.
Two state officials Thursday urged consumers that had dealings with Equity First Credit Foundation, or its predecessors Equity First Marketing and Equity First Financial, to stop working with these companies. And consumers should contact their creditors to make sure bills have been paid and check with their banks to stop any more money from being extracted.
Francine Giani, director of the Division of Consumer Protection, and Reed Richards, chief deputy director of the Utah Attorney General's Office, said the division and the attorney general's office are investigating the firms. The investigation follows complaints from consumers that Equity had taken money out of consumer's bank accounts to pay their bills, as part of a debt management program, but that the bills were never paid.
Consumers also were notified that First Credit would stop doing business as of June 21, and the clients were urged to either pay their own bills or have another firm, Family Financial Education Foundation, of Evanston, Wyo., handle their debt program.
"We felt the money of these individuals was severely at risk," Richards said. "A search warrant executed last Friday (June 30) gave us substantial amounts of financial information that is now being evaluated."
Once that evaluation is complete, state officials will decide what action to take next, he said.
Giani said that Equity First Credit Foundation already has been named in a civil class action lawsuit brought by the division in February involving more than 200 customers.
This new action is a criminal investigation that could involve 350 customers.
Giani urged consumers to contact their creditors to explain the situation and call their banks to stop any more payments from going out. She also suggested that consumers check with their banks to see if the individuals can make use of a federal process to reclaim money distributed within the last 60 days.
It was unclear whether Equity First Credit Foundation (now known as National Financial Education Association) is still in operation, she said.
Phone calls to Equity First Credit Foundation were answered by one recorded message that led to a full voice mailbox. Another message led to a recorded voice saying, "Sorry you're having trouble. Please call again later."