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Injunction shuts down New Leaf

By Times Staff Writer
Published July 8, 2005

New Leaf Associates says it can terminate credit card and student loan debt through a highly technical administrative service. But Attorney General Charlie Crist says the Port Richey company's statements are lies used to collect more than $8-million in fees from debt-burdened consumers looking for relief.

Crist went to Pinellas County Circuit Court on Thursday to get an injunction against New Leaf and two dozen affiliated companies and people. The order prohibits marketing debt-termination services, disposing of business assets and destroying documents.

New Leaf officials could not be reached for comment.

New Leaf and its marketing arm, Quantum Business Consultants, enrolled about 2,200 clients since it began operating in October 2003, using a network of independent agents, Crist said. Clients paid fees of more than $3,000 each.

Crist said the company never had a process for eliminating debt and paid only a handful of its clients' debts. The company and its agents relied on false advertising, didn't provide required disclosures and cancellation notices and broke state laws regulating credit repair companies, he said.

When clients followed the company's advice not to pay debts, their credit was damaged instead of being repaired as they had been promised, he said. The Attorney General's Office said it has received 185 complaints about the company, more than any other issue has generated this year. The defendants could be ordered to pay restitution and civil penalties.

[Last modified July 8, 2005, 01:02:17]