Attorney General Phil Weiser sues Strategic Financial Services for illegal debt-relief scheme

Jan. 19, 2024 (DENVER) – Attorney General Phil Weiser today announced his office, along with six other states and the Consumer Financial Protection Bureau, filed suit against Strategic Financial Services, its affiliated shell companies, and owners Ryan Sasson and Jason Blust for an illegal debt-relief scheme that bilked over $100 million from consumers, many of them families who were already struggling financially.

Weiser joined other state attorneys general from Delaware, Illinois, Minnesota, New York, North Carolina, and Wisconsin, along with the CFPB, in filing a sealed complaint against Sasson, Blust, and their enterprise on Jan. 9, 2024. The complaint alleges they and the companies collected millions in illegal fees from consumers who were at a high risk of financial exploitation. The state attorneys general and the CFPB sought and obtained a temporary restraining order, which is an emergency order from a judge that put an immediate halt to the enterprise’s illegal actions.

“Consumers who were struggling financially and may well have been desperate to reduce their debts turned to the defendants for help. Instead, they were exploited, leaving them even worse off,” said Weiser. “I won’t hesitate to hold accountable anyone who seeks to deceive or harm consumers, especially when those harmed are experiencing financial hardship.”

Strategic Financial Services operated their illegal scheme by hiding in plain sight using dozens of shell companies to shield their business operations from scrutiny. The company and its owners advertised their services to financially struggling consumers, leading them to believe they could take out loans that would help them reduce their overall debt. When consumers called the company, Strategic Financial Services employees steered them not to loans, but to debt-relief services that promised legal support for debt reduction negotiations.

In fact, the company and its owners did little to provide debt relief. When consumers signed up for their services, they paid up-front fees that went into escrow accounts. The high fees left little money remaining in escrow to settle the debts. The defendants then withdrew the fees, totaling millions of dollars, enriching themselves at the cost of struggling consumers whose financial problems only increased.

The harm Strategic Financial Services caused was not limited to collecting fees and providing little or nothing in return. Consumers relied on the company to their detriment. In one case, the company signed up a consumer who went from being in good standing with creditors to having those creditors file suit and debiting the person’s bank account. In another case, a consumer paid more than $500 a month for many years only to end up settling with the creditor for more money than was owed when the program began.

Colorado, along with the six other states and the CFPB, filed a complaint and requested a temporary restraining order and preliminary injunction in the U.S. District Court for the Western District of New York. Colorado brought claims under its authority to enforce the federal Telemarketing Sales Rule and Consumer Financial Protection Act.

Read the complaint filed on January 9, 2024.

Consumers who believe they have been victimized by phony debt-relief schemes should file a complaint with the Colorado Attorney General’s Office at StopFraudColorado.gov.