Attorney General Lockyer Files Consumer Protection Lawsuit Against Debt Reduction Company

Customers Saddled with Deeper Debt and Damaged Credit Ratings

Wednesday, February 19, 2003
Contact: (916) 210-6000,

(SAN DIEGO) – Attorney General Bill Lockyer today filed a lawsuit against a Santa Clarita business that told consumers it could eliminate their credit card debts for pennies on the dollar, but failed to deliver as advertised, did not provide promised refunds and usually left customers in even worse financial shape.

The lawsuit filed in San Diego County Superior Court alleges the debt reduction firm, Briggs & Baker, has violated state laws prohibiting false and misleading advertising, and unlawful, unfair or deceptive business practices. The complaint asks the court to order Briggs & Baker to provide refunds to customers who paid for services they did not receive, and to permanently prohibit the firm from engaging in the deceptive practices.

"This firm and its ads preyed on consumers, who paid thousands of dollars to rid themselves of crushing debt," said Lockyer. "Instead, Briggs & Baker left its customers with more debt, ruined credit histories and sometimes no choice but to file for bankruptcy. And when those customers tried to get their money back, Briggs & Baker left them out in the cold."

Targeting mainly Southern California consumers, Briggs & Baker sells its services through radio, Internet, newspaper, phone and direct mail advertisements. The Attorney General's complaint alleges the advertisements contain misleading claims that Briggs & Baker can settle credit card debt for "pennies on the dollar," that credit card companies are "offering their all-time best deals," and that Briggs & Baker's longstanding relationships with major banks enables it to "leverage extreme discounts for their clients."

According to the complaint, Briggs & Baker made representations that one of its services, the "accord and satisfaction" program, would allow consumers to settle their credit card debts for 11 percent of the outstanding balance. The complaint alleges that, as operated by Briggs & Baker, the "accord and satisfaction" program worked like this:

Briggs & Baker would tell clients to stop making payments on their credit card balances and to cease contact with their credit card company. Briggs & Baker eventually would contact the consumer's credit card company and falsely tell the creditor that its clients disputed their bills. Briggs & Baker then would send their client's personal check, with a restrictive endorsement, for 11 percent of the outstanding balance.

When the creditor processed the check and applied the 11 percent payment to the total balance, Briggs & Baker would tell their client that, despite the creditor's continuing collection activity, the debt was completely eliminated. When clients complained that their debt had not been eliminated, and demanded a refund of the up-front service fees paid to Briggs & Baker, the firm again failed to deliver as promised. Instead, Briggs & Baker would inform clients that no refund was due, because the firm had earned its fees, which typically ranged from 20 percent to 30 percent of the outstanding credit card debt.

But the complaint alleges the "accord and satisfaction" program, as well as other services sold by Briggs & Baker, usually did not work. In the end, consumers were left saddled with higher debt and damaged credit ratings because they had stopped making payments.

Briggs & Baker still advertises its services, and CEO Todd Baker has started another debt reduction business in Santa Clarita called Debt Resolution Specialists. Briggs & Baker now operates out of the DRS office.

Lockyer offered the following advice to consumers when dealing with for-profit debt reduction businesses: "Do your research and scrutinize all claims made by these companies. And remember, if it sounds too good to be true, it usually is."

Consumers who believe they have been victimized by Briggs & Baker, or other debt reduction companies, can file a complaint online at the Attorney General's Website. The address is

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PDF icon 03-018.pdf29.97 KB
PDF icon 03-018.pdf29.97 KB