Two Massachusetts-based debt negotiation companies have ceased operations nationwide and settled a three-year regulatory battle with Connecticut’s banking commissioner over allegations they provided unlicensed debt settlement services in the Nutmeg State. Commonwealth Servicing Group and Commonwealth Law Group signed a stipulation and agreement with Banking Commissioner Jorge Perez last week that resolves enforcement actions that […]
Two Massachusetts-based debt negotiation companies have ceased operations nationwide and settled a three-year regulatory battle with Connecticut’s banking commissioner over allegations they provided unlicensed debt settlement services in the Nutmeg State.
Commonwealth Servicing Group and Commonwealth Law Group signed a stipulation and agreement with Banking Commissioner Jorge Perez last week that resolves enforcement actions that began in 2022.
The settlement, filed with the state Department of Banking, includes no admission of wrongdoing by either company. Both firms told the regulator they “have ceased debt negotiation operations nationwide and are no longer performing services on behalf of Connecticut residents,” according to the agreement.
As debt settlement companies, the firms advertised they could negotiate debt reductions of 40% to 60% for consumers struggling with credit card and other unsecured debts.
Commonwealth Servicing and Commonwealth Law Group operated from the same office complex at 500 Cummings Center Drive in Beverly, Massachusetts. Court documents show the businesses were owned by the same limited liability company.
Commonwealth Servicing provided the administrative and negotiation services, while Commonwealth Law Group — led by Texas attorney Amber Florio — provided what the companies claimed was legal supervision that should have exempted them from Connecticut's debt negotiation licensing requirements.
Connecticut's Department of Banking disagreed. The dispute began after a former client of Commonwealth Law Group complained to the department, which launched an investigation into the companies’ operations.
The department alleged that Commonwealth Servicing engaged in unlicensed debt negotiation for at least 428 Connecticut consumers between January 2019 and October 2020, collecting more than $900,000 in fees.
Also, it accused the companies of advertising debt negotiation services on their websites and negotiating debt settlements directly with Connecticut consumers who paid fees "in excess of that allowed" under state law.
Commonwealth Servicing and Commonwealth Law Group fought back, filing a lawsuit in Hartford Superior Court in November 2022 seeking declaratory and injunctive relief. They argued they qualified for an attorney exemption under Connecticut law, citing a 2015 state Supreme Court case that found attorneys providing debt negotiation services are presumed to be engaged in the practice of law and fall under judicial branch regulation rather than banking commissioner oversight.
The legal battle wound through the courts for more than two years. After the banking department moved to dismiss the case and argued it should proceed administratively, a Superior Court judge denied the motion. The department appealed, and the case was transferred from Appellate Court to the Connecticut Supreme Court.
In an April 2025 decision, the Supreme Court remanded the case to Superior Court for additional discovery. Rather than proceed, the parties opted to settle eight months later.
Under the settlement terms, Commonwealth Servicing and Commonwealth Law Group agreed to withdraw all claims in their Hartford Superior Court lawsuit. If either company wants to resume debt negotiation activities in Connecticut in the future, they must notify the commissioner in writing 30 days in advance.
