According to the terms of the settlements, the Division of Consumer Affairs identified violations of the Consumer Fraud Act and/or the Advertising Regulations arising from the advertisement, offering for sale and/or sale of services to locate, deliver, recover or assist in the recovery of property by the following:

• U.S. Financial Funding LLC and Jeffrey Richman, of Charlotte, North Carolina;
• Capital Recovery III, LLC, Capital Recovery Inc. II, Charles Demes and Alan Dumond of Chicago, Illinois;
• Jose A. Danoys d/b/a “JD Assets Recovery” of Old Bridge, New Jersey; and
• Hunterdon Legal Service LLC, d/b/a “Superior Court Services,” and Steven C. Searfoss, d/b/a “Steven C. Thomas,” of Flemington, New Jersey.

Under the terms of the settlements, these businesses were collectively assessed $309,673.33 in civil penalties, disgorgement to consumers, and reimbursement of attorneys’ fees and costs.

“Surplus funds” are funds remaining after a property foreclosure sale and all payments ordered by the Court have been made, which can often total in the thousands of dollars. The homeowner is entitled to apply for these funds if they exist.

“These settlements resolve allegations that these businesses falsely represented that consumers needed their assistance to obtain surplus funds from foreclosure sales. Homeowners who have lost their homes in foreclosure should be aware that they do not need to pay a business in order to apply for money they are rightfully entitled to,” Acting Attorney General John J. Hoffman said.

“Some businesses allegedly convinced consumers to pay thousands of dollars for unnecessary help obtaining ‘surplus funds’ by making misrepresentations and creating confusion,” said Steve Lee, Acting Director of the Division of Consumer Affairs. “Consumers should be aware of such illegal practices whenever they are going through a foreclosure.”

As to U.S Financial Funding, the alleged violations included misrepresenting that surplus funds and other property would be lost to the government if not recovered quickly; using contracts that failed to set forth the consumer’s share of the surplus funds; and charging fees that were more than 35% of the value of the property recovered. In the settlement, U.S. Financial Funding was assessed $71,250.77, of which $66,250.77 is suspended and will become vacated if it follows the terms of its settlement with the Division for the next three years. As part of the settlement, U.S. Financial Funding also agreed to discontinue doing business in New Jersey.

As to Capital Recovery, the alleged violations included failing to identify the property to be recovered in its solicitation letters; using contracts that failed to set forth the consumer’s share of the surplus funds; and charging fees for the recovery of property that were excessive or unjust. In the settlement, Capital Recovery was assessed $97,197.30, of which $40,000 is suspended and will become vacated if the terms of the settlement with the Division are successfully met for the next three years.

As to JD Assets Recovery, the alleged violations included using a solicitation letter which misrepresented that “time is of the essence” and that after a period of time the property would be permanently lost; and using contracts that failed to set forth the consumer’s share of the surplus funds after deduction of its recovery. In the settlement, JD Assets Recovery was assessed $36,000, of which $30,000 is suspended and will become vacated if the terms of its settlement with the Division are successfully met for the next three years.

As to Hunterdon Legal Service, the alleged violations included using the term “Superior Court Services” in its solicitation letters and contracts, thus suggesting an affiliation with the Superior Court, which was not the case; misrepresenting that it was entitled to a fixed percentage of any property to be recovered; and charging fees for recovery of property that were excessive or unjust. In the settlement, Hunterdon Legal Service was assessed $105,225.26, of which $40,000 is suspended and will become vacated if terms of its settlement with the Division are successfully met for the next three years.

Homeowners can apply for surplus funds themselves, by contacting the Trust Fund Unit of the State Superior Court at (609) 292-4012. To learn more about surplus funds, please see the Division of Consumer Affairs’ Consumer Brief online at www.njconsumeraffairs.gov/News/Consumer%20Briefs/surplus-funds-scam.pdf.

Investigators Loretta Creggett and Michelle Davis in the Division of Consumer Affairs Office of Consumer Protection conducted the investigation of these cases.

Deputy Attorneys General Labinot A. Berlajolli, Mark E. Critchley, and Russell M. Smith Jr., in the Consumer Fraud Prosecution Section of the Division of Law represented the Division of Consumer Affairs in these matters.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504- 6200.

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