American Laser Skincare Customers Not Feeling Pretty

December 16, 2014 | By Peg Brickley | The Wall Street Journal

Beauty treatment chain American Laser Skincare abruptly shut its doors last month. Now, some customers say they're being asked to pay for treatments they never received, while others who say they paid in advance want their money back. To file a claim please click here.

"How do I get my money back from the package I just bought? Why did you guys let me buy a new package for services you knew you were not going to honor. Filing bankruptcy is unfortunate, but known months, years in advance. You took my money. This is fraud," wrote one consumer on the shuttered company's Facebook page.

American Laser's owner, Philadelphia private equity firm Versa Capital Management, has said it won't respond to Facebook posts. The firm, which bought the operation from its prior bankruptcy in 2012, said it had already provided "substantial funding to aid the company with its performance."

Chapter 7 trustee Alfred Giuliano did not respond to requests for information about the state of affairs at American Laser, which said in its bankruptcy petition it owes more than $50 million and expects no return to unsecured creditors. As trustee, Mr. Giuliano is responsible for tracking down money to pay American Laser's creditors.

High-priced prettification is a financial enterprise, not an aesthetic one, said New York consumer lawyer Brian Bromberg. And a solid business it was, if a copy of an American Laser credit agreement is any indication. The interest rate was 24.99%, which kicked in if a customer's bill wasn't paid in full in three years.

"American Laser wasn't selling a service. It was basically in the financing business," said the lawyer, who isn't involved in the case.

American Laser's website says: "It's not necessary to delay a treatment you want, or worry about paying for everything up front. We are able to establish credit lines within minutes-making it quick and simple to schedule your treatments."

Borrowing for Botox might not seem the best financial decision. However, those who financed their self-improvements could be in better luck than those who actually handed over cash up front.

One of the company's chosen "financing business partners," Comenity Capital Bank, issued a statement last week saying it is working with American Laser's former clients. Those who received services will pay for what they received "as stated in the terms and conditions of their credit agreement," according to the statement from Comenity, an Alliance Data Systems Corp. unit that offers private-label credit cards for retailers.

Those who say they're being asked to pay for services not received should write to Comenity to receive a credit, Comenity said.

Mr. Bromberg says customers should step away from the Facebook gripe fest, assemble their documents, pick up a pen and state their case on paper. "Regardless of what the trustee does, the customers should be sending disputes to Comenity," the lawyer said. Send by certified mail, not email, he said, recommending that customers "be detailed, state reasons, [and] keep copies."

Under Federal Trade Commission rules, any defense a customer had against paying American Laser, it also has against paying Comenity, he said.

The consumer lawyer said customers may also have other rights if their American Laser financing arrangement was a credit-card deal. The National Consumer Law Center website and the California Department of Consumer Affairs site are good starting points for customers interested in exploring their options, Mr. Bromberg said.

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