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CDS Financial controversies

Controversies tied to this brand in public sources. A listing is not a finding of fault.

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  1. 2026

    Connecticut fines CDS Financial $1.2 million for unlicensed debt renegotiation

    Fine or penalty

    In October 2026, the Connecticut Banking Commissioner issued a cease-and-desist order and imposed a $1.2 million civil penalty on CDS Financial for engaging in debt renegotiation with at least 12 Connecticut debtors without a proper license. The state agency also imposed separate civil penalties of $600,000 and $300,000 on CDS Financial managers and control persons David Lugo and Kevin Lugo. According to the order, the company charged fees in excess of permitted maximums, entered contracts missing the state-required three-day cancellation disclosure, and employed a scheme to defraud or mislead Connecticut debtors, including misappropriating funds withdrawn from debtors' bank accounts.

    Connecticut Banking Commissioner Jorge Perez on Oct. 6, 2026 issued a cease-and-desist order and imposed a $1.2 million civil penalty on CDS Financial for engaging in debt renegotiation with at least 12 Connecticut debtors without a proper license. The state agency also imposed separate civil penalties of $600,000 and $300,000 on CDS Financial managers and control persons David Lugo and Kevin Lugo. According to the order, the company charged fees in excess of permitted maximums, entered contracts missing the state-required three-day cancellation disclosure, and employed a scheme to defraud or mislead Connecticut debtors, including misappropriating funds withdrawn from debtors' bank accounts.

    Source excerpt

    • CDS Financial and David Lugo employed a scheme, device or artifice to defraud or mislead Connecticut debtors in connection with debt negotiation
    • deposited such funds into an account of CDS Financial, and then misappropriated such funds by spending the funds on operating expenses, direct payments to David Lugo and other personal expenses.
    • In the order issued Aug. 18 against CDS Debt Relief LLC a/k/a CDS Debt Relief, LLC d/b/a CDS Financial, of West Palm Beach, Florida, and Saugus, Massachusetts, Perez ordered the company and the two managers to make restitution and provide disgorgement.
    Source