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IN THE MATTER OF: THE KLOSK LAW GROUP, INC. ("Respondent") * * * * * * * * * * * * * * * * * * * |
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ORDER TO CEASE AND DESIST ORDER OF REPAYMENT OF FEES AND ORDER IMPOSING CIVIL PENALTY |
I. PRELIMINARY STATEMENT
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Sections 36a-671 to 36a-671d, inclusive, of the Connecticut General Statutes contained in Part II of Chapter 669 of the Connecticut General Statutes, “Debt Adjusters and Debt Negotiation”;
WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an investigation of the activities of Respondent, pursuant to the authority granted by Section 36a-17(a) of the Connecticut General Statutes, to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
WHEREAS, on August 19, 2011, the Commissioner, acting pursuant to Sections 36a-671a(b), 36a-671a(c) 36a-52(b), 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, issued a 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 (collectively “Notice”) against Respondent, which Notice is incorporated herein by reference;
WHEREAS, on August 22, 2011, the Notice was sent by registered mail, return receipt requested, to Respondent’s agent (Registered Mail Nos. RB028020708US and RB028020478US);
WHEREAS, the Notice provided Respondent with the opportunity for a hearing, and stated that if a hearing was not requested within 14 days of its receipt, the Commissioner would issue an order that Respondent cease and desist from violating Sections 36a-671(b) and 36a-671b(b) of the Connecticut General Statutes, and may order that the maximum civil penalty of Twenty Thousand Dollars ($20,000) be imposed upon Respondent;
WHEREAS, on August 25 and 31, 2011, Respondent received the Notice and no request for a hearing has been received by the Commissioner;
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Respondent’s engaging in debt negotiation in this state without obtaining the required license constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes. Such violation forms the basis to issue an order to cease and desist pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes;
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Respondent’s engaging in debt negotiation services on and after October 1, 2009, with at least one (1) Connecticut resident and collecting fees under terms which did not comply with Section 36a-671b(b) of the Connecticut General Statutes and the Schedule of Maximum Fees established by the Commissioner pursuant to said section, constitutes one (1) violation of Section 36a-671b(b) of the Connecticut General Statutes. Such violations form the basis to issue an order to cease and desist pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes;
WHEREAS, also in the Notice, the Commissioner found that the fees charged by Respondent for debt negotiation services were excessive and ordered, pursuant to Sections 36a-671a(c) and 36a-52(b) of the Connecticut General Statutes that, not later than 10 days from receipt of the Notice, Respondent provide repayment of $7,712.73 by cashier’s check, certified check or money order to the Connecticut resident identified in Exhibit A of the Notice, and, among other things, provide evidence of such repayment to the Director of the Consumer Credit Division;
WHEREAS, no evidence of such repayment was provided to the Director of the Consumer Credit Division by September 4, 2011;
WHEREAS, Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that “[i]f the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person. No such order shall be issued except in accordance with the provisions of chapter 54”;
WHEREAS, Section 36a-50(a)(2) of the Connecticut General Statutes provides, in pertinent part, that “[i]f such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person”;
WHEREAS, Section 36a-50(a)(3) of the Connecticut General Statutes provides, in pertinent part, that “[e]ach action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54”;
AND WHEREAS, Section 36a-1-31(a) of the Regulations of Connecticut State Agencies provides, in pertinent part, that “[w]hen a party fails to request a hearing within the time specified in the notice, the allegations against the party may be deemed admitted. Without further proceedings or notice to the party, the commissioner shall issue a final decision in accordance with section 4-180 of the Connecticut General Statutes and section 36a-1-52 of the Regulations of Connecticut State Agencies”.
WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an investigation of the activities of Respondent, pursuant to the authority granted by Section 36a-17(a) of the Connecticut General Statutes, to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
WHEREAS, on August 19, 2011, the Commissioner, acting pursuant to Sections 36a-671a(b), 36a-671a(c) 36a-52(b), 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, issued a 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 (collectively “Notice”) against Respondent, which Notice is incorporated herein by reference;
WHEREAS, on August 22, 2011, the Notice was sent by registered mail, return receipt requested, to Respondent’s agent (Registered Mail Nos. RB028020708US and RB028020478US);
WHEREAS, the Notice provided Respondent with the opportunity for a hearing, and stated that if a hearing was not requested within 14 days of its receipt, the Commissioner would issue an order that Respondent cease and desist from violating Sections 36a-671(b) and 36a-671b(b) of the Connecticut General Statutes, and may order that the maximum civil penalty of Twenty Thousand Dollars ($20,000) be imposed upon Respondent;
WHEREAS, on August 25 and 31, 2011, Respondent received the Notice and no request for a hearing has been received by the Commissioner;
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Respondent’s engaging in debt negotiation in this state without obtaining the required license constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes. Such violation forms the basis to issue an order to cease and desist pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes;
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Respondent’s engaging in debt negotiation services on and after October 1, 2009, with at least one (1) Connecticut resident and collecting fees under terms which did not comply with Section 36a-671b(b) of the Connecticut General Statutes and the Schedule of Maximum Fees established by the Commissioner pursuant to said section, constitutes one (1) violation of Section 36a-671b(b) of the Connecticut General Statutes. Such violations form the basis to issue an order to cease and desist pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes;
WHEREAS, also in the Notice, the Commissioner found that the fees charged by Respondent for debt negotiation services were excessive and ordered, pursuant to Sections 36a-671a(c) and 36a-52(b) of the Connecticut General Statutes that, not later than 10 days from receipt of the Notice, Respondent provide repayment of $7,712.73 by cashier’s check, certified check or money order to the Connecticut resident identified in Exhibit A of the Notice, and, among other things, provide evidence of such repayment to the Director of the Consumer Credit Division;
WHEREAS, no evidence of such repayment was provided to the Director of the Consumer Credit Division by September 4, 2011;
WHEREAS, Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that “[i]f the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person. No such order shall be issued except in accordance with the provisions of chapter 54”;
WHEREAS, Section 36a-50(a)(2) of the Connecticut General Statutes provides, in pertinent part, that “[i]f such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person”;
WHEREAS, Section 36a-50(a)(3) of the Connecticut General Statutes provides, in pertinent part, that “[e]ach action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54”;
AND WHEREAS, Section 36a-1-31(a) of the Regulations of Connecticut State Agencies provides, in pertinent part, that “[w]hen a party fails to request a hearing within the time specified in the notice, the allegations against the party may be deemed admitted. Without further proceedings or notice to the party, the commissioner shall issue a final decision in accordance with section 4-180 of the Connecticut General Statutes and section 36a-1-52 of the Regulations of Connecticut State Agencies”.
II. FINDINGS OF FACT AND CONCLUSIONS OF LAW
| 1. |
The Commissioner finds that the matters asserted, as set forth in paragraphs 1 through 6, inclusive, of Section II of the Notice, shall constitute findings of fact within the meaning of Section 4-180(c) of the Connecticut General Statutes, and that the conclusions, as set forth in paragraphs 1 and 2 of Section III of the Notice, shall constitute conclusions of law within the meaning of Section 4-180(c) of the Connecticut General Statutes and Section 36a-1-52 of the Regulations of Connecticut State Agencies. |
| 2. |
The Commissioner finds that Respondent has engaged in acts or conduct which, pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes, forms the basis to issue an order to cease and desist against Respondent, and, pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes, forms the basis to impose a civil penalty upon Respondent. |
| 3. |
The Commissioner finds that the payment of $7,712.73 in fees by the Connecticut resident identified in Exhibit A of the Notice to be excessive, upon consideration that the Schedule of Maximum Fees issued by the Commissioner only permits a debt negotiator of unsecured debt to collect total aggregate fees, including the initial fee and service fees, not to exceed ten percent (10%) of the amount by which the consumer’s debt is reduced as part of each settlement as agreed to in the debt negotiation service contract as each settlement is achieved, the debt negotiation services contract was not successfully completed and the Connecticut resident received no benefit from such contract. |
| 4. | The Commissioner finds that the Notice was given in compliance with Sections 36a-52(a), 36a-50(a) and 4-177 of the Connecticut General Statutes. |
III. ORDER
Having read the record, I HEREBY ORDER, pursuant to Sections 36a-671a(b), 36a-52(a) 36a-50(a) and 36a-671a(c) of the Connecticut General Statutes, that:
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The Klosk Law Group, Inc. a/k/a Klosk Law Firm, Inc., CEASE AND DESIST from violating Sections 36a-671(b) and 36a-671b(b) of the Connecticut General Statutes; |
| 2. |
A CIVIL PENALTY of Twenty Thousand Dollars ($20,000) be imposed against The Klosk Law Group, Inc. a/k/a Klosk Law Firm, Inc., to be remitted to the Department of Banking by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than thirty (30) days from the date this Order is mailed; |
| 3. |
The Klosk Law Group, Inc. a/k/a Klosk Law Firm, Inc., REPAY FEES in the amount of Seven Thousand Seven Hundred Twelve Dollars and 73/100 ($7,712.73) by cashier’s check, certified check or money order, to be remitted and made payable to the Connecticut resident identified in Exhibit A attached hereto, no later than ten (10) days from the date this Order is mailed and shall provide to Carmine Costa, Banking Department Manager, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov evidence of such repayment; and |
| 4. |
This Order shall become effective when mailed.
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Dated at Hartford, Connecticut
this 14th day of October 2011. ________/s/_________
Howard F. Pitkin
Banking Commissioner
This Order was sent by certified mail,
return receipt requested, to
Respondent on October 17, 2011.
The Klosk Law Group, Inc. Certified Mail No. 70081140000249743817
a/k/a Klosk Law Firm, Inc.
Attention: Michael J. Klosk, Agent
22811 Nadine Circle, Unit B
Torrance, California 90505
The Klosk Law Group, Inc. Certified Mail No. 70081140000249743824
a/k/a Klosk Law Firm, Inc.
Attention: Michael J. Klosk, Agent
18101 Von Karman Avenue, #330
Irvine, California 92612