On May 15, the California Department of Business Oversight (DBO) announced that it filed a complaint against a debt payment company for allegedly operating in California without having the proper license and for charging fees in excess of statutory limits. According to the complaint, the company contracts with borrowers to make their mortgage, credit card, or other loan payments for them, and then debits their account every two weeks in an amount equal to one-half of the required monthly payment on the loan. This payment schedule results in 26 debits per year, equating to an extra month’s worth of payments. The company claims that the extra debits are used to pay down the principal on the loan. The lawsuit alleges, however, that the California Financial Code requires companies providing debt payment services to be licensed as “proraters” by the DBO, and the company has never had such a license. The complaint also alleges that the company’s “set up fee” of one-half of the monthly loan payment amount often far exceeded the $50 limit on origination fees imposed by state law, and that the company’s advertising misrepresented how much its customers would pay for services and how much they would save on interest. Since 2009, the company has collected more than $300 million from its 10,000-25,000 customers for distribution to creditors and earned more than $10 million in fees.