The Banking Commissioner (“Commissioner”) is charged with the administration of Sections 36a-671 to 36a-671d, inclusive, of the 2010 Supplement to the General Statutes contained in Part II of Chapter 669 of the Connecticut General Statutes, “Debt Adjusters and Debt Negotiation”.

Pursuant to the authority granted by 36a-17(a) of the Connecticut General Statutes the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has conducted an investigation to determine if Respondent has violated, is violating or is about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner.

Section 36a-17(a) of the Connecticut General Statutes provides:

Section 36a-52 of the Connecticut General Statutes provides, in pertinent part, that:

Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part, that:

1.	Respondent is an Arizona limited liability company with a place of business located at 7590 E. Gray Road, # 204, Scottsdale, Arizona.
2.	At no time relevant hereto has Respondent been licensed to engage in or offer to engage in debt negotiation in this state.
3.	On Respondent’s website, Respondent is offering to assist debtors, not excluding Connecticut residents, in negotiating, or to attempt to negotiate on behalf of the debtor, the terms of each debtor’s obligations with one or more creditors of each debtor, for or with the expectation of a fee, commission or other valuable consideration.
4.	Respondent entered into a written contract for the provision of debt negotiation services on or about June 16, 2009, with a Connecticut resident who negotiated or agreed to the terms of the service contract in person, by mail, by telephone or via the Internet while physically present in this state (“Resident 1”).  Respondent’s contract with Resident 1 was on-going and in effect on and after October 1, 2009.
5.	By letters dated October 14, 2009, and December 29, 2009, both sent by certified mail, return receipt requested, the Division informed Respondent that it had information indicating that Respondent was engaged in debt negotiation in the state of Connecticut without requisite licensure.
6.	In the October 14, 2009 letter, Respondent was advised to cease and desist from such activity until the required license had been procured.
7.	The October 14, 2009 letter was received by Respondent on October 19, 2009.
8.	In the December 29, 2009 letter, the Division requested that Respondent provide a “detailed description of the services JHass offers to consumers in this state and a listing of all contracts JHass entered into with Connecticut consumers.”
9.	The December 29, 2009 letter was received by Respondent on January 4, 2010.
10.	In correspondence to the Division dated January 4, 2010, Respondent stated that “[o]ur clients work with . . . [a third party service provider (“TPSP”)] to set up, administer and maintain an individual reserves account. . . .  [O]ur clients have their own individual contractual relationship wherein our clients give . . . [the TPSP] permission, through automatic withdrawal, to take the amount of money called for in their contract for settlement negotiation from their checking or savings account on a monthly basis and deposits same into their personal account with . . . [the TPSP].  [The TPSP] . . . in turn distributes funds pursuant to the client’s contract with J. Hass Group.”
11.	Respondent entered into a written contract for the provision of debt negotiation services on or about February 23, 2010, with a Connecticut resident who negotiated or agreed to the terms of the service contract in person, by mail, by telephone or via the Internet while physically present in this state (“Resident 2”).
12.	The terms of the contract between Respondent and Resident 2 involved, among other things, payment of fees to Respondent based on fifteen percent (15%) of Resident 2’s total enrolled debt prior to Respondent achieving settlement, plus monthly fees in excess of forty dollars ($40) per month.
13.	On April 6, 2010, Respondent applied for a debt negotiation license in Connecticut (“Application”).  Respondent’s Application remains pending.
14.	In connection with its Application, and in response to the Division’s December 29, 2009 letter, as more fully described in paragraphs 8 and 9 above, Respondent identified a total of three (3) Connecticut consumers with whom it had entered into written contracts for debt negotiation services on and after October 1, 2009.
15.	Resident 2 was not identified by Respondent in its Application through the disclosure described in paragraph 14 above.
16.	In connection with its Application, and in response to the Division’s December 29, 2009 letter, as more fully described in paragraphs 8 and 9 above, Respondent identified eleven (11) Connecticut consumers with whom it had entered into written contracts for debt negotiation services before October 1, 2009, which were on-going as of the date of its Application.  For each of these 11 consumers, Respondent stated that the fees to Respondent were between fourteen percent (14%) and eighteen percent (18%) of the consumers’ enrolled debt.
17.	In connection with its Application, and in response to the Division’s December 29, 2009 letter, as more fully described in paragraphs 8 and 9 above, Respondent identified seven (7) Connecticut consumers with whom it had entered into written contracts for debt negotiation services before October 1, 2009, and who had since “graduated”, but did not specify the dates on which such “graduations” were achieved.  For each of these 7 consumers, the fees to Respondent were fifteen percent (15%) of the consumers’ enrolled debt.
18.	Resident 1 was not identified by Respondent in its Application through the disclosures described in paragraphs 16 and 17 above.
19.	In connection with its Application, Respondent provided a copy of its Client Agreement for Debt Settlement Services (“Client Agreement”).
20.	Among other things, the Client Agreement:  (a) states that Respondent’s program applies to unsecured debts, such as medical bills and credit card debts; and (b) requires a debtor to make monthly payments to a designated custodial account to be managed by an account agent, which payments will be used to pay settlements that the debtor has approved, to pay fees due to Respondent pursuant to the Client Agreement, and to pay fees due to the account agent.
21.	Among other things, the Client Agreement requires a debtor to pay Respondent fees based on fifteen percent (15%) of the total debt enrolled prior to Respondent achieving settlement, plus a set-up fee and a monthly service fee.
22.	On July 6, 2010, in connection with its Application, Respondent submitted a revised Client Agreement for Debt Settlement Services (“Revised Client Agreement”).
23.	Among other things, the Revised Client Agreement:  (a) states that Respondent’s program applies to unsecured debts, such as medical bills and credit card debts; and (b) requires a debtor to make monthly payments to a designated custodial account to be managed by an account agent, which payments will be used to pay settlements that the debtor has approved, to pay fees due to Respondent pursuant to the Revised Client Agreement, and to pay fees due to the account agent.
24.	Among other things, the Revised Client Agreement requires a debtor to pay Respondent fees based on the total amount of debt enrolled prior to Respondent achieving settlement, plus a set-up fee and a monthly forty-nine dollar ($49) fee.
25.	In correspondence dated July 6, 2010 relating to its Application, Respondent identified a single TPSP (“Identified TPSP”) as the “repository of all of . . . [Respondent’s] clients’ funds.”
26.	Under the terms of written contracts with the Identified TPSP (“Identified TPSP Agreements”), debtors appoint and authorize the Identified TPSP to provide services related to the debtor’s contract with their identified debt settlement company.  Specifically, the Identified TPSP Agreements authorize and appoint the Identified TPSP to debit funds from a bank account designated by the debtor via an Automatic Clearing House (ACH) Authorization and to deposit and hold those funds in a trust account.  According to the terms of the Identified TPSP Agreements, the debits from the debtor’s designated bank account into the trust account are made for the purpose of satisfying the terms of the debt settlements negotiated by the debtor’s identified debt settlement company under separate contract between the debtor and the identified debt settlement company, and for paying fees to the Identified TPSP and the identified debt settlement company.
27.	As of mid-July 2010, Respondent is the identified debt settlement company on two hundred seventy-four (274) Identified TPSP Agreements entered into with Connecticut residents who negotiated or agreed to the terms of an underlying service contract with Respondent in person, by mail, by telephone or via the Internet while physically present in this state and pursuant to which Respondent has collected or is collecting from such debtors fees for debt negotiation.
28.	Of the 274 Identified TPSP Agreements described in paragraph 27 above, one hundred sixty-three (163) were entered into before October 1, 2009, but were in effect and fees were paid to Respondent on and after October 1, 2009.  Of these 163 Identified TPSP Agreements, one hundred ten (110) were in effect and fees were paid to Respondent as of the date of Respondent’s Application.
29.	Of the 274 Identified TPSP Agreements described in paragraph 27 above, one hundred eleven (111) were entered into on and after October 1, 2009.  Of these 111 Identified TPSP Agreements, ninety-five (95) were in effect and fees were paid to Respondent as of the date of Respondent’s Application.
30.	Of the 274 Identified TPSP Agreements described in paragraph 27 above, one hundred five (105) were entered into and fees were paid to Respondent after Respondent received the October 14, 2009, letter described in paragraphs 5 through 7, inclusive, above.
31.	In connection with the debtor accounts established through the 274 Identified TPSP Agreements, as more fully described in paragraph 27 above, Respondent has collected fees from debtors in an aggregate amount that exceeds fifty percent (50%) of the aggregate amount deposited by such debtors.
32.	In connection with the debtor accounts established through the 274 Identified TPSP Agreements, as more fully described in paragraph 27 above, Respondent has collected fees from debtors based on the total amount of enrolled debt prior to Respondent achieving settlement, and/or has collected initial fees in excess of fifty dollars ($50), and/or monthly fees in excess of eight dollars ($8) per creditor or forty dollars ($40) per month.
33.	As of the date of this Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing, Respondent is collecting fees for debt negotiation from Connecticut debtors’ accounts established through Identified TPSP Agreements.

Section 36a-53a of the Connecticut General Statutes provides:

Section 36a-671 of the 2010 Supplement to the General Statutes provides, in pertinent part, that:

Section 36a-671a(b) of the 2010 Supplement to the General Statutes provides, in pertinent part, that:

Section 36a-671b(b) of the 2010 Supplement to the General Statutes provides:

The Schedule of Maximum Fees established by the Commissioner provides, in pertinent part, as follows:

1.	Respondent’s offering to engage in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 2 and 3 of the Matters Asserted, constitutes a violation of Section 36a-671(b) of the 2010 Supplement to the General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Ten Thousand Dollars ($10,000), subject to its right to a hearing on the allegations set forth above.
2.	Respondent’s engaging in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 2 to 33, inclusive, of the Matters Asserted constitutes a violation of Section 36a-671(b) of the 2010 Supplement to the General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed One Hundred Thousand Dollars ($100,000), subject to its right to a hearing on the allegations set forth above.
3.	Respondent’s entering into a service contract with Resident 2 that did not comport with the requirements of Section 36a-671b(b) of the 2010 Supplement to the General Statutes and the schedule of maximum fees established by the Commissioner pursuant to said section, as more fully described in paragraphs 11 and 12 of the Matters Asserted, constitutes a violation of Section 36a-671b(b) of the 2010 Supplement to the General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Ten Thousand Dollars ($10,000), subject to its right to a hearing on the allegations set forth above.
4.	Respondent’s engaging in debt negotiation services on and after October 1, 2009 with two hundred seventy-four (274) debtors and collecting fees under terms which did not comply with Section 36a-671b(b) of the 2010 Supplement to the General Statutes and the schedule of maximum fees established by the Commissioner pursuant to said section, all as more fully described in paragraphs 16 to 32, inclusive, of the Matters Asserted, constitutes 274 violations of Section 36a-671b of the 2010 Supplement to the General Statutes.  Such violations form the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Two Million Seven Hundred Forty Thousand Dollars ($2,740,000), subject to its right to a hearing on the allegations set forth above.
5.	Respondent’s statements made in connection with its Application that it had only three (3) contractual relationships with Connecticut consumers entered into after October 1, 2009, as more fully described in paragraph 14 of the Matters Asserted, when in fact there were ninety-five (95) contractual relationships as of the date of Respondent’s Application, as more fully described in paragraphs 15 and 29 of the Matters Asserted, constitute statements made in a document filed with the Commissioner which were, at the time and in the light of the circumstances under which they were made, false or misleading in a material respect, in violation of Section 36a-53a of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Ten Thousand Dollars ($10,000), subject to its right to a hearing on the allegations set forth above.
6.	Respondent’s statements made in connection with its Application that it had only eleven (11) contractual relationships with Connecticut consumers entered into before October 1, 2009, and on-going as of the date of Respondent’s Application, as more fully described in paragraphs 16 and 17 of the Matters Asserted, when in fact there were one hundred ten (110) contractual relationships as of the date of Respondent’s Application, as more fully described in paragraphs 18 and 28 of the Matters Asserted, constitute statements made in a document filed with the Commissioner which were, at the time and in the light of the circumstances under which they were made, false or misleading in a material respect, in violation of Section 36a-53a of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Ten Thousand Dollars ($10,000), subject to its right to a hearing on the allegations set forth above.

The Commissioner finds that public welfare requires immediate action to issue a temporary order requiring Respondent to cease and desist from engaging in or offering to engage in debt negotiation in this state in violation of Section 36a-671(b) of the 2010 Supplement to the General Statutes, to cease and desist from collecting fees in violation of 36a-671b(b) of the 2010 Supplement to the General Statutes, to cease and desist from violating Section 36a-53a, and to take such other action as set forth herein to effectuate the purposes of Section 36a-52(b) of the Connecticut General Statutes.  Specifically, a significant number of Connecticut residents, who are already in debt, are being materially prejudiced, and future Connecticut debtors who may do business with Respondent require protection where Respondent:  (a) continues to offer and to engage in debt negotiation without required licensure and did so in at least one hundred instances after being advised by the Division to cease and desist from such activity until the required license had been procured; (b) has collected and is believed still to be collecting fees that violate Connecticut law in connection with such unlicensed activity; and (c) has filed statements with the Commissioner that are false or misleading in a material respect with regard to the scope of its debt negotiation activity with Connecticut consumers.

WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Section 36a-671a(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes;

AND WHEREAS, the Commissioner has made the finding required under Section 36a-52(b) of the Connecticut General Statutes.

THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that JHass, L.L.C. a/k/a J. Hass Group, LLC immediately CEASE AND DESIST from violating Sections 36a-671(b) and 36a-671b(b) of the 2010 Supplement to the General Statutes and Section 36a-53a of the Connecticut General Statutes.  This Temporary Order shall become effective upon receipt by JHass, L.L.C. a/k/a J. Hass Group, LLC, and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order.

THE COMMISSIONER FURTHER ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that:

Not later than 10 days from receipt of this Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing, Respondent shall provide to Marlene M. Mannix, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or marlene.mannix@ct.gov, a list of all Connecticut residents with whom it has entered into contracts for debt negotiation services to date where such contracts were either:  (a) entered before October 1, 2009 but were in effect on or after October 1, 2009; or (b) entered into on and after October 1, 2009.  Such submission shall include:

1.	A copy of each contract pursuant to which Respondent is providing such debt negotiation services; and
2.	Each debtor’s name and address, and full history of each debtor’s account, specifying the dates and amounts disbursed:  (a) to Respondent, (b) to any TPSP, (c) into escrow to be disbursed at a later date, (d) to creditors on accounts, (e) to the debtor; and (f) to any other entity or party.

FURTHER, notice is hereby given to Respondent that the Commissioner intends to issue an order requiring Respondent to CEASE AND DESIST from violating Sections 36a-671(b) and 36a-671b(b) of the 2010 Supplement to the General Statutes and Section 36a-53a of the Connecticut General Statutes and impose a CIVIL PENALTY upon Respondent as set forth herein, or in any amendment to this Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing, and subject to Respondent’s right to a hearing on the allegations set forth herein or in any amendment to this Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing.

A hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following its receipt of this Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes.  This Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending.  The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address.  If Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”.  Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a hearing officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies.  If a hearing is requested, the hearing will be held on January 5, 2011, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.

The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondent fails to appear at the requested hearing.  At such hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.

If Respondent does not request a hearing within the time prescribed, the Commissioner will issue an order that Respondent cease and desist from violating Sections 36a-671(b) and 36a-671b(b) of the 2010 Supplement to the General Statutes and Section 36a-53a of the Connecticut General Statutes, and may order that the maximum penalty of Two Million Eight Hundred Eighty Thousand Dollars ($2,880,000) be imposed upon Respondent.

So ordered at Hartford, Connecticut
this 5th day of November 2010.                ________/s/_________
                                                          Howard F. Pitkin
                                                          Banking Commissioner

I hereby certify that on this 5th day of November 2010, the foregoing Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by registered mail, return receipt requested, to JHass Group, L.L.C. a/k/a J. Hass Group, LLC, 7590 E. Gray Road, # 204, Scottsdale, Arizona 85260, registered mail no. RB028037218US; and to its agents, Jason Hass, 7590 E. Gray Road, #204, Scottsdale, Arizona 85260, registered mail no. RB028037221US; and National Registered Agents, Inc., 12 Old Boston Post Road, Old Saybrook, Connecticut 06457, registered mail no. RB028037235US; and to Respondent via facsimile to (877) 572-5050.

                                                          ________/s/_________

                                                          Stacey Valerio
                                                          Prosecuting Attorney

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