HELP SOUGHT FOR 'PREYED-ON' DEBTORS.

Byline: Daily News

SANTA CLARITA - California Attorney General Bill Lockyer on Wednesday sued a Santa Clarita company that had told consumers it could eliminate credit card debts for pennies but instead left many customers in worse financial straits.

The lawsuit filed in San Diego County Superior Court says Briggs & Baker violated state laws prohibiting false and misleading advertising and conducted unlawful, unfair or deceptive business practices.

The complaint is seeking refunds for customers who paid for services they did not receive and to prohibit the firm from engaging in the deceptive practice.

``This firm and its ads preyed on consumers, who paid thousands of dollars to rid themselves of crushing debt,'' Lockyer said in a release. ``Instead, Briggs & Baker left its customers with more debt, ruined credit histories and sometimes no choice but to file for bankruptcy. And when those customers tried to get their money back, Briggs & Baker left them out in the cold.''

Todd Baker, the company's chief executive officer, did not return a phone call Wednesday.

Briggs & Baker still advertises its services and Baker has started another debt-reduction business, called Debt Resolution Specialists, in Santa Clarita. Briggs & Baker now operates out of that office.

The suit says the company targeted Southern California residents through its advertisements on the radio, Internet, in newspapers and by telephone and direct mail ads.

Those ads contained ``misleading claims that Briggs & Baker can settle credit card debt for 'pennies on the dollar,' that credit card companies are 'offering their all-time best deals,' and that Briggs & Baker's long-standing relationships with major banks enables it to 'leverage extreme discounts for their clients,''' the suit said.

The company had said it could help consumers settle their credit card debts for 11 percent of the outstanding balance - and told clients to stop making credit payments and cease contact with companies they owed, the complaint said.

Briggs & Baker eventually contacted the credit card companies and informed each creditor that its clients had disputed their bills, the suit said. Briggs & Baker would then send in their clients' personal checks, with a restrictive endorsement, for 11 percent of the outstanding balance.

When the creditor processed the check and applied the 11 percent payment to the total balance, Briggs & Baker told their clients that, despite the creditor's continuing collection activity, the debt was eliminated, the suit said.

When clients discovered the scam and demanded a refund of the upfront service fees paid to Briggs & Baker, the firm refused, according to the complaint. Briggs & Baker's response was that no refunds were due because the firm had earned its fees, which typically ranged from 20 percent to 30 percent of the outstanding credit card debt.

In the end, consumers were left with higher debt and damaged credit ratings because they had stopped making payments, Lockyer said.

Consumers who believe they have been victimized by the company, or any other debt-reduction company, can file a complaint online at www.ag.ca.gov/consumers/mailform.htm.