What can I do if a is credit counseling company has been falsely taking out money from my account?

UPDATED: Oct 1, 2022

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What can I do if a is credit counseling company has been falsely taking out money from my account?

Credit counseling signed me up with their program to help me pay off my credit card loan. When they reached out to my creditor, the creditor denied their offer. Credit counseling failed to advise me of this and instead asked to increase my current monthly payment. It wasn’t until a year after that I was called by my creditor who notified me that credit counseling was denied the offer they had asked for. After I paid the total amount of my outstanding balance, credit counseling is still taking money out of my account. What should I do?

Asked on November 25, 2017 under Business Law, California


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You can sue the credit counseling company for fraud. 
Fraud is the intentional misrepresentation of a material fact made with knowledge of its falsity with the intent to induce your reliance upon which you justifiably relied to your detriment.
In other words, credit counseling did not disclose that your creditor had denied the offer, but increased your monthly payment and continued to take money out of your account.
You can recover punitive damages ( a substantial amount to punish the intentional wrongful acts committed by the credit counseling company) in your lawsuit for fraud.
You should also contact your bank to stop the automatic withdrawals from your account by the credit counseling company.

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