Idaho judge affirms decision for debt settlement company to pay nearly $500K

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A Virginia-based debt settlement company will need to pay nearly half-a-million dollars in reimbursements, civil penalties and attorney fees, affirmed an Ada County judge.

On Sept. 22, Judge Lynn Norton of the Fourth Judicial District Court issued a decision affirming all aspects of a final order issued by the director of the Idaho Department of Finance on April 30, 2022, against Wall & Associates.

The original order found Wall & Associates in violation of the Idaho Collection Agency Act for participating in unlicensed debt settlement activity. The company was ordered to pay back $271,987.50 in fees charged to Idaho tax debtors, pay a civil penalty of $162,000 and reimburse the Department of Finance $42,016.60 in attorney fees.

Norton issued a 62-page opinion which analyzed and affirmed Director Patricia Perkins final order.

“I appreciate the decision of (Judge Norton), as well as the investigative efforts of my staff and legal counsel,” Perkins said in a statement. “I am pleased that restitution orders have been put in place in favor of the consumers in this case.”

Debt settlement companies tend to offer services like financial counseling and working on behalf of consumers to settle debts at reduced amounts compared to what they may owe. Regulations have been put in place by the state to help the Department of Finance protect consumers and businesses from potential abusive practices.

The initial enforcement action against the Virginia company began in December of 2019, after the Department of Finance received consumer complaints about Wall’s tax debt settlement practices, which, according to the department, “involved claiming to be able to help Idaho tax debtors settle and greatly reduce their debts with the IRS and the Idaho Tax Commission.”

It was also found “various troubling business practices,” and that Wall required a license under the Idaho Collection Agency Act to engage in debt settlement activity with state consumers which it didn’t have.

After Judge Norton’s affirmation, Wall filed a notice of appeal on Nov. 2 with the Idaho Supreme Court. According to the department, the company has never applied for a debt settlement license in Idaho and is not regulated by any state. Minnesota and Virginia have each filed consumer protection lawsuits against the company.