Ersatz Debt-Aid Firm Pays $5,000 Penalty

A Los Angeles consumer aid organization on Tuesday received $5,000 in court-ordered contributions from a defunct Encino firm that pleaded no contest in December to charges of falsely promising to help debtors resolve credit problems.

The check was sent by Los Angeles City Atty. James K. Hahn to Consumer Credit Counselors, a 23-year-old nonprofit organization that helps clients budget their way out of debt.

Hahn also forwarded a $1,000 check to the Los Angeles Police Department to pay for costs of investigating the firm, Credit Improvement Bureau.

Municipal Judge D. Joseph Spada in December placed the owners of Credit Improvement Bureau on 18 months probation and ordered them to pay refunds of $90 to $400 to 14 former customers. The firm was accused of charging fees to correct erroneous credit records without providing the service. The company closed in October, 1987.