7 sue Creditrust claiming it deceived them on collections

Specialist in credit risks is sued for $14 million

Credit cards

June 14, 2000|By Bill Atkinson | Bill Atkinson,SUN STAFF

Seven individuals have filed separate lawsuits against Creditrust Corp. and its chairman, alleging that the company used deceptive and illegal collection practices to coax them into paying off delinquent loans.

Combined, the lawsuits, which were filed in Baltimore City Circuit Court Monday evening, seek about $14 million in compensatory and punitive damages.

Baltimore-based Creditrust, which is struggling to raise badly needed capital, manages more than 2 million in delinquent credit-card accounts with a face value of $4.9 billion. The company was founded in 1991 by Joseph K. Rensin, who is chairman.

"We have no reason to believe that these allegations are true and we will vigorously defend these actions," Thomas A. Henning, Creditrust's general counsel.

The lawsuits allege Creditrust employees violated Maryland consumer protection law by advising individuals that if they made installment payments on their debt, their poor credit ratings would be wiped clean.

Creditrust had "no intention to actually remove the derogatory credit ratings" and had no authority to change the ratings, the lawsuits said. The suits also allege that individuals were "coerced" to to pay off the credit-card loans by using other cards or refinancing their homes.

Creditrust employees worked to persuade the individuals to pay even though the statute of limitations to collect on the debt had expired, the lawsuits state.

The individuals, represented by Baltimore attorney Joanne L. Suder, are: Harold Harris of Anne Arundel County; Aaron Long of Vista, Calif.; Charles L. Banks, Dillard, Ga.; Charles Banks, Gilcrest, Colo.; Ray Martin, Taylors, S.C.; Aaron T. Jones, Hobbs, N.M.; and Adolph A. Harris, Chicago.

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