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CrediQuest Corporation and LegalAudix Marketing Services Face-to-Face Enrollment Agreement

A tipster (send in your tips here) sent in the following agreement on face-to-face marketing services by CrediQuest. I love my tipster (send in your tips here)s. They always send in the most interesting things.

CrediQuest apparently provides services to Law Firms that want to sell debt relief services to people.

I’ve bolded the interesting parts of the agreement.

After reading through this agreement, any marketer that signs it must be insane. I can’t even begin to understand how a marketer is going to be aware or comply with all the liability that is being thrown on them as a result of the agreement.

Some of my favorite parts:

  • Marketer further understands that any Debt Settlement services provided for residents of Wisconsin will not include any actual verbal or written negotiations
  • NOTWITHSTANDING ANYTHING SET FORTH HEREIN TO THECONTRARY, NEITHER MARKETER NOR ANY AFFILIATE MAY USE THE TERMS DEBT SETTLEMENT, DEBT ADJUSTMENT, DEBT NEGOTIATION OR PRO-RATING IN ANY FORM OF ADVERTISING (INCLUDING WEBSITE CONTENT) AND MUST REFERENCE DIVERSE SERVICES FOR FINANCIALLY DISTRESSED CONSUMERS.
  • The close occurs ahead of the face-to-face meeting.
  • The first DMP payment is kept as a fee.
  • The approved script at the end of this agreement seems to fly in the face of much of what is said in the agreement.

You will find my observations below inside the [ ] and near the bolded sections.

CrediQuest Corporation and LegalAudix Marketing Services Face to Face Enrollment Agreement
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Marketing Services
– Face-To-Face Enrollment Agreement -

This Marketing Services Agreement (“Agreement”) is between CrediQuest, Inc, a corporation organized under the laws of the State of Maryland (“Processor”) and _________________________ a __________________ organized under the laws of the State of __________ (“Marketer”). Marketer and Processor shall collectively be referred to as the “Parties” and individually as a “Party.”

RECITALS

A. Marketer provides marketing and data base services directly or through subcontractors and other third parties (the “Affiliate(s)”). These services focus on financially distressed consumers who are seeking help in connection with their financial situation. [Data base services? A lawyer can't provide their own data base services? Does that create a security problem for the clients of the lawyer if an outside non-lawyer is providing data base services for them?]

C. Processor provides services to Law Firms and other companies, collectively referred to as “Service Provider(s)” that work with financially distressed consumers. [Actually how agreement reads, there is no B.]

C. Marketer is interested in assisting Processor with services Processor provides to Service Providers and Processor would like such help.

D. For valuable consideration that both Parties acknowledge, the Parties agree as follows:

1. Scope of Services

1.1 Processor retains Marketer to assist it in providing services to Service Providers involved in Debt Settlement, Chapter 7 Bankruptcy and Fair Debt Collection Practices Act work. Marketer acknowledges that Processor and the Service Providers it works with generally do not offer Chapter 13 Bankruptcy services. [If a service provider can file a chapter 7 bankruptcy, why couldn't they file a chapter 13 bankruptcy?] Any such services provided must comply with the limitations and restrictions set forth in this Article 1.

1.2 For purposes of this Agreement, the term “Debt Settlement” shall have the meaning set forth in the Uniform “Debt Settlement Management Services Act” and the term “Debt Relief Services” shall have the meaning contained in regulations released by the Federal Trade Commission on July 27, 2010 as modified from time to time (the “FTC Regulations”). A person or persons interested in Debt Settlement or Chapter 7 Bankruptcy services identified by Marketer or one of its Affiliates shall be referred to as a “Prospect.” [Prospect, well I think that shows how potential consumers in trouble are truly viewed.] The term “Services” shall refer to marketing and data base management services more fully described below for organizations offering Debt Relief Services to consumers who are residents of the United States.

1.3 Marketer agrees to engage in Services directly or indirectly through Affiliates for purposes of identifying consumers interested in Debt Relief Services such as Debt Settlement, Credit Counseling/Debt Management Plans or Chapter 7 Bankruptcy and assisting such consumers to complete the documentation necessary for a qualified consumer to be evaluated for possible participation in a Service Provider Debt Relief Services program, a Debt Relief Services program sponsored by another type of organization or another kind of program intended to help financially distressed consumers deal with their financial condition. [It seems to me that the intention is to sell debt relief services and not "to help financially distressed consumers." Otherwise, why exclude chapter 13 bankruptcy or additional measures to best assist people with money troubles?]

1.4 Notwithstanding anything else to the contrary, if Marketer engages in interstate telephone calls in the process of providing Services where all fees are to be paid by the consumer for the service are not entirely success based as referenced in the FTC Regulations, Marketer agrees that no consumer will sign any contract, pay any money or otherwise commit to a contract unless the consumer has engaged in an in-person face-to face sales presentation made by the seller of such services. [The responsibility for determining if a consumer is or has gone through any interstate switch/carrier/or provider, rests solely on the Marketer and/or their affiliates. That seems like an almost impossible task to comply with. If you provide services in only Florida and a consumer calls you from a Florida number but it is actually a cell phone and they are calling from Montana, how would you know?] Moreover, if Marketer is asserting that no interstate telephone calls are part of any proposed transaction, Marketer’s entire operation has to be limited to a single state in which it is physically located and Marketer must also certify regardless of the telephone number upon which a consumer talks with Marketer, all phone calls are made from and to locations in that same state. While phone calls may be routed through a switch that may be located in a different state, no conversations included recorded messages cannot come from any place other than the single state where all participants in the telephone call are located and which is also the location of Marketer’s operation. If more than 2 parties participate in a call in order to qualify as an intrastate call, all parties have to be located in the single state. Failure to comply with these requirements shall result in immediate termination for Cause of this Agreement.

1.5 If Marketer is providing Services in connection with an entirely success based fee model for Debt Relief Services as referenced in the FTC regulations, the documentation for such program as well as the actions by any consumer who ultimately participates in any such Program may not allow for payments to be made until the consumer has achieved success as defined in the FTC Regulations.

1.6 Other than assisting in providing Services as described below, Marketer shall have no role or responsibility in any Debt Relief Services program, Chapter 7 Bankruptcy, or Fair Debt Collection Practices Act work offered by any Service Provider affiliated with Processor. [So the Marketer and/or their affiliates bear all the responsibility and liability for selling the service but can have no role or responsibility in delivering the service, so how do they know the exact service that may or is being delivered?]

1.7 Marketer agrees that as long as this Agreement is in effect, without advance written authorization it will not provide Services for Debt Relief Services, Bankruptcy (including Chapter 7 and 13) or Fair Debt Collection Practices Act work for anyone other than Processor and its related Service Providers or processors. Processor and Marketer agree that while this Agreement is in effect Marketer will not forward any Prospect to anyone else for Debt Relief Services, Chapter 7 Bankruptcy or Fair Debt Collection Practices Act services even if Processor or the Service Provider where Processor directed Prospect declines to accept the Prospect. Violation of this Section shall result in immediate termination of this Agreement and will also result in termination of any right of Marketer to receive any further Revenue Sharing payments as more fully described below.

1.8 The Parties agree that Marketer will receive no compensation for the identification and referral of any consumer to Processor and/or any Service Provider Processor provides services. Rather all compensation Marketer will receive is for the service of assisting consumers to complete the documentation necessary for evaluation. [Seriously? So the "marketer" is marketing to find people for free and although the marketing or identification of a "prospect" is a required first step the goal of the marketer is actually to sell "completing documentation services?" Later you will see how the marketer is compensated based on a percentage of debt for debt settlement services. So how is a percentage of debt compensation package relate to a fee for assisting the consumer to complete some forms?]

1.9 Once Marketer has identified a Prospect, Marketer shall have the Prospect complete Enrollment Package forms supplied by Processor. Each Enrollment Package includes a proposed contract (“Engagement Contract”) with a Service Provider for Debt Settlement and/or Chapter 7 Bankruptcy services as well as other documents. [It sounds to me as if the Marketer will have to describe the services offered to a prospect in order to identify likely candidates for the service provider. We are seemingly supposed to believe that the identification of prospects and discussions with prospects involves no selling of services prior to any face-to-face sales presentation and is only to identify a willingness of a prospect to complete an enrollment packet for no reason. Let's be real here, the marketer will have effectively sold the consumer on debt relief services prior to a consumer completing an enrollment packet. Otherwise, why would a consumer complete an enrollment packet?]

On top of that inconsistency, note the marketer is having the consumer complete and engagement contract with the lawyer or law firm (“service provider”) that will get the file. This happens prior to the consumer talking to the lawyer. That seems like a big issue.

Notwithstanding the foregoing, provided there has been interstate telephone calls and the fees to be paid by the consumer are not entirely success based, unless Marketer engages in an in-person face-to-face sales presentation, Marketer will make sure that no Prospect executes the Engagement Contract. Marketer understands that unless a consumer participates in an in person face-to-face sales presentation prior to execution of an Engagement Contract where there had been interstate telephone calls and fees paid by the consumer are not entirely success based, the Engagement Contract will be void. The Parties estimate that the total time to complete the task of explaining options available to consumer as set forth in the Protocol and assisting in completing documentation will take cumulatively in one or more contacts at least forty-five (45) minutes. [I just can't see how a marketer would get a prospect to contact the marketer unless there is some "selling" of debt relief services.] Marketer agrees that any deviation from the Protocol will require express authorization of a lawyer licensed to practice in the jurisdiction where the applicable consumer resides. The Protocol is attached to this Agreement as Exhibit A and incorporated by reference. Processor without advance notice may unilaterally modify the content of Exhibit A. Marketer further understands that any such changes will be dictated by Service Providers working with Processor.

1.10 The Enrollment Package may be completed electronically including the use of electronic signatures or in pen and ink with manual signatures, the use of facsimile signatures or some combination thereof as specified by Processor from time to time. [So if it can be completed electronically, what is to prevent the consumer from being sent the enrollment packet without a face-to-face meeting.] This Enrollment Package may be in the name of one or more Service Providers and there may be several different types depending upon a variety of factors. Processor shall designate which Enrollment Package to submit based upon the particular factors Processor unilaterally without advance notice shall have the right to modify all or portions of the applicable Enrollment Packages. Marketer further undertands that any such changes will be dictated by Service Providers working with Processor.

1.11 Once the Enrollment Package is complete (minus the execution of the Engagement Contract if interstate telephone calls are part of the sales process and the proposed consumer fees are not limited to success based fees), Marketer shall immediate arrange for the delivery of each Enrollment Package to Processor to the Processor. Such delivery shall be electronically or by fax as designated from time to time by Processor.

1.12 Marketer shall immediately transfer via telephone, any consumer who has completed either a Product Purchase Invoice or Enrollment Package to the Quality Assurance/Compliance department of Processor. [It is interesting to note that even before the prospect even communicates with the services provider, which should happen prior to a consumer being sold a debt relief program, the consumer has spoken with the marketer/affiliate and at least one compliance employee. That's a lot of layers and representation prior to speaking with the actual provider of services.] Should an immediate telephonic transfer of the Prospect not be possible at the time of Enrollment, Marketer agrees to reschedule specific transfer within one (1) business day. Other specific protocol for transfer procedures shall be provided by Processor from time to time and must be followed by Marketer in 100% of cases. Failure to follow established procedure will result in the default in obligation for Processor to Pay Marketer on any revenues derived from the sale of Products to specific consumer.

1.12 Processor shall advise Marketer when the face-to-face sales presentation will be conducted if interstate telephone calls were involved in process and consumer fees are not all success based, Marketer agrees to keep in contact with the Prospect for purposes of ensuring the person or person attends the face-to-face in-person sales presentation.

1.13 Notwithstanding anything else set forth herein to the contrary, Marketer agrees that as long as this Agreement is in effect any required face-to-face sales presentations must be completed through Processor and LegalAudix, LLC even if Marketer is working with some other third party. Violation of this Section is immediate grounds for Termination for Cause of this Agreement.

This is the first mention of LegalAudix, LLC. According to the State of Maryland there is no company registered to do business under the name LegalAudix. The only mention I could find online was:

J.B. Schaeffer Law, LLC c/o Legal Audix
9250 Rumsey Rd Suite 101
Columbia, MD 21045

This is also the registered address of CrediQuest, and the registered agent is Aaron Portz. The description of CrediQuest says it is “to market debt relief services to the public and perform any other legal business allowed by the laws of the stte of Maryland. – Source. It is also the address of Strategic Debt Solutions. – Source And it is the address for Redline Debt Relief.

CrediQuest Corporation and LegalAudix Marketing Services Face to Face Enrollment Agreement

The president of CrediQuest is Joseph F. D’Alonzo. He is also the CEO of Strategic Debt Solutions and the founder of Redline Debt Relief. – Source

What is very interesting is that there is no J.B. Schaeffer listed by the Maryland Bar Association. The J.B. Schaeffer Law, LLC lists this address as it’s business location in Maryland. – Source

1.14 Marketer acknowledges that a mandatory key element for any person or persons to participate in a Debt Settlement program through any Service Provider working with Processor is the existence of a genuine financial hardship and that a consumer without a genuine financial hardship is not appropriate for Debt Settlement. Likewise, Marketer understands that each Prospect must meet certain other criteria or they will not be an appropriate candidate for Debt Settlement and failure to meet such criteria would decrease the chance of successfully completing a Debt Settlement program. Exhibit B sets forth guidelines for a consumer to participate in a Debt Settlement with a Service Provider affiliated with Processor. Each Prospect must meet specific criteria as identified in Exhibit B. Processor may unilaterally modify Exhibit B from time to time in its sole discretion without advance notice. Exhibit B is incorporated by reference into this Agreement. The Parties acknowledge thaService Providert even if a consumer meets the requirements of Exhibit B, there is no guarantee that any Service Provider will agree to accept the particular consumer as a client and allow them into any Debt Settlement program.

1.15 Prior to forwarding any file to Processor, Marketer on behalf of itself and all Affiliates and their respective employees, agents and subcontractors shall ensure that the consultant who processed the Enrollment Package and dealt directly with the consumer executes a declaration under penalty of perjury in the form attached hereto as Exhibit C that is incorporated by reference certifying in part that there have been no misrepresentations. In addition, if any employee or representative of Marketer has assisted any Prospect in completing a Financial Profile and Budget, the employee or representative must also execute a declaration at the end of the Financial Profile and Budget. Marketer acknowledges no Enrollment Package is complete and no arrangement for a sales presentation can be arranged unless it contains an executed Exhibit C and the declaration at the end of the Financial Profile and Budget if any employee or representative assisted in its preparation. Processor in its sole discretion may as an alternative require both the Consultant and the Prospect to execute the same declaration in a similar form to be supplied by Processor or have the Prospect initial the pages of Exhibit C if a Prospect signature is not required.

1.16 Marketer on behalf of itself and all Affiliates and their respective employees, agents and subcontractors represents, warrants and agrees to comply with the requirements of all applicable, local, state and federal laws and regulations as modified from time to time regulating or related to Debt Relief Services, including by way of example and not limitation the Controlling the Assault of Non Solicited Pornography and Marketing Act of 2003, Gramm-Leach-Bliley Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, the Dodd Frank Act, the Credit Repair Organizations Act, the Telephone Consumer Protection Act, the Card Act, regulations promulgated by Bureau of Consumer Financial Protection, the FTC Regulations and other regulations issued by the Federal Trade Commission. Violation of this Section is immediate grounds for Termination with Cause. [Does anyone even begin to believe that some small time affiliate of a marketer is going to have the skills, knowledge or capabilities to comply with all of those laws?]

1.17 Marketer on behalf of itself and any of its employees, agents, subcontractors, Affiliates and affiliated parties represents, warrants that any marketing, advertising or sourcing of Prospects Marketer may engage in any media including website content directly or indirectly in connection with this Agreement will comply with the laws, regulations, interpretative guidelines, enforcement polices, requirements, rulings and guidelines as modified from time to time as set forth by any local, state and federal regulatory or enforcement agencies including by way of example and not limitation, the United States Federal Trade Commission, the US Attorney General, state banking commissions, state departments of corporations, state attorney generals, state department of consumer affairs, state bars, state organizations regulating the conduct of lawyers for Debt Relief Services, legal services, Bankruptcy services, credit repair and credit monitoring and as modified from time to time. Violation of this Section is immediate grounds for Termination with Cause. [Again, does anyone even begin to believe that some small time affiliate of a marketer is going to have the skills, knowledge or capabilities to comply with all of those laws?]

1.18 Marketer on behalf of itself and any of its employees, agents, subcontractors and Affiliates further represents that any advertising or sourcing Marketer may engage in directly or indirectly in any media including website content will also comply with the rules for legal advertising as promulgated by the applicable state bar or other regulatory state entity as modified from time to time. [How is a marketer going to be able to comply with all the rules for legal advertising unless they obtain prior approval from all states in which their marketing may be viewed and would they also need to make sure that they knew the state in which the service providers were also located?] Marketer and all of its Affiliates including any direct or indirect source of Marketer will not engage in any form of legal solicitation as defined in applicable laws and will not contact any consumer unless the particular consumer has authorized the contact in advance. Neither Marketer nor any Affiliate may contact any potential Prospect unless the potential Prospect has agreed to be contacted in advance. The restrictions and limitations in this Section go all the way down to and apply to the original source of the lead regardless if it was purchased or otherwise obtained from a third party. [And how would anyone know this for certain?] The provisions of this Section are applicable on a jurisdiction by jurisdiction basis if Marketer or any of its Affiliates are trying to attract consumers residing in the particular jurisdiction. It is the responsibility of Marketer to consult with its counsel at its cost to ensure it is in compliance with the provisions of this Article and every other Article in this Agreement. The cost and maintenance of any telemarketing license is the sole responsibility of Marketer. [That would cost a fortune in legal fees to comply with.] Violation of this Section is immediate grounds for Termination with Cause.

1.19 To the extent Marketer engages in any direct mail advertising, all such advertising shall comply with all requirements of the US Postmaster and the US Post Office. Moreover, Marketer shall make sure the text of any direct mail piece and the manner in which Marketer obtained the contact information does not constitute legal solicitation in the geographic area where the mailing takes place and does not violate any legal advertising rules. It is the responsibility of Marketer at its cost to have direct mail advertising reviewed by its counsel. Any liability associated with the failure to utilize legal direct mail as described in this Article is the liability of Marketer. [Again, passing all the liability to the marketer and their affiliates.] Such liability includes any exposure of any lawyer or Service Provider who is subject to any regulatory inquiry based upon a direct mail piece utilized by Marketer or one of its Affiliates. Violation of this Section is immediate grounds for Termination with Cause.

1.20 Marketer on behalf of itself and any of its employees, agents, subcontractors, Affiliates and affiliated parties agrees to fully comply with the state and federal requirements of the DO NOT CALL LIST as well as all other restrictions, laws and regulations on telemarketing and in states where a telemarketing license is required not engage in telemarketing activities unless they have a valid telemarketing license. Likewise, it is up to Marketer to determine if it has to be licensed under debt adjusting and pro-rating laws in any jurisdiction and to obtain any licenses necessary if it markets in the applicable jurisdiction. [I wonder how many marketers or affiliates have any idea how much it costs to comply with these statutes?] No one makes any representations or warranties regarding DO NOT CALL LIST issues, if telemarketing or debt adjusting/pro-rating licenses are or are not needed and any matter relating to such licensing as well as if Marketer needs any other type of license or registration to conduct business. This is the sole responsibility of Marketer to confer with its own counsel. Any costs are the sole responsibility of Marketer. Any liability associated with the failure to obtain a license including but not limited to refunding all consumer fees is the liability of Marketer. Violation of this Section is immediate grounds for Termination with Cause.

1.21 Marketer on behalf of itself and any of its employees, agents, subcontractors, Affiliates and affiliated parties shall maintain a privacy policy compliant with all state and federal applicable laws, regulations and rules and such policy shall be listed on its website. It is the responsibility of Marketer to confer with its counsel to ensure that its privacy policy complies with all applicable laws. Violation of this Section is immediate grounds for Termination for Cause.

1.22 Subject to the exception to advertising for residents of Florida and what is contained in the approved Protocol and permissible only in follow up telephone calls as more fully described herein, notwithstanding anything else set forth in this Agreement to the contrary, in any form of marketing, promotional activities or advertising regardless of the media (including websites), Marketer and its Affiliates may not use the name or logo or distinctive identifies of any lawyer or Service Provider to whom Processor transfers Prospects or Processor. Likewise, subject to the exceptions listed above, no such advertising may state or imply that a lawyer or Service Provider will be involved or state or imply legal services will be provided. The requirements of this Section go down to and cover the original source that initially identified the Prospect. [Interesting this section is specifically for Florida. I wonder if any of the service providers have previously been in trouble with Florida?]

1.23 Notwithstanding anything set forth in herein to the contrary, any advertising utilized by Marketer or any Affiliate in any media (including website content) must contain a disclaimer that states that services are not available in all states or jurisdictions and results may vary.

1.24 Notwithstanding anything else set forth in this Agreement to the contrary, any advertising in any media (including website content) designed or resulting in attracting a Prospect who is a resident of the State of Florida must be approved in advance by the applicable Service Provider and the Florida Bar if required before it can be utilized. Upon written notice, this provision may be extended to include other jurisdictions.

1.25 Notwithstanding anything else set forth in this Agreement to the contrary, Marketer understands depending upon new developments advertising limitations may change and all advertising may require advance written approval before it may be run and whose name may or may not be used in advertising may also change. If there is a change, Processor will notify Marketer in writing as soon as possible. For this purpose advertising includes every media and website content. It is impossible to predict if and when any such change may take place. Marketer agrees that it will be required to comply with any such change since Processor will be reacting to directives in good faith designed to comply with legal developments.

1.26 Notwithstanding anything else set forth herein to the contrary, Marketer shall maintain for at least seven (7) years from the date of usage all advertising (written and oral text) and track the sourcing of all advertising (including website content) back to its origin no matter how many layers are involved. [And when the marketer gets shut down or goes out of business, who pays for record storage then?] Each layer of the advertising must be in full compliance with the provisions of this Article 1. This Section shall survive termination of this Agreement. Upon request, Marketer shall deliver all such materials to Processor or any applicable Service Provider.

1.27 Marketer acknowledges that Processor has advised it that it should retain the services of a compliance counsel to advise it in connection with all of its marketing activities and the legality of all such activities. Moreover, Marketer acknowledges that even if Processor or any Service Provider fails to object or say anything or even states that a marketing activity is permissible, Marketer is still not relieved from responsibility or liability relating to activities that others view as not permissible and is therefore subject to the indemnification obligations set forth herein. Such liability could include by way of example and not limitation repayment of all consumer fees. [More passing the buck.]

1.28 Marketer on behalf of itself and any of its employees, agents, subcontractors, Affiliates and affiliated parties fully understands and agrees it:

  1. may not make any guarantees to any consumer;
  2. cannot tell or imply to a consumer that the consumer will not get sued or forced into arbitration;
  3. cannot tell or imply any consumer that all creditors/collectors will agree to negotiate all debt obligations enrolled in a Debt Relief Services program and must notify the consumer that some creditors/collectors may be unwilling to negotiate on specific debts;
  4. cannot tell or imply to any consumer that credit will improve and in fact credit may worsen possibly even resulting in freezing, lowering or closing lines of credits or credit card accounts not enrolled;
  5. cannot represent or imply that a lawyer or Service Provider will provide legal services of any kind other than what is specified in the Enrolment Package that includes a contract that has to be reviewed and executed by the consumer;
  6. cannot tell or imply to consumers creditor/collector calls will cease or be reduced in frequency or severity;
  7. cannot tell consumers they should stop making payments to creditors/collectors;
  8. must fully describe how the program described in the Enrollment Package operates;
  9. must fully describe the risks and costs associated with the program described in the Enrollment Package;
  10. must advise the consumer of the alternatives to the program described in the Enrollment Package including advantages and disadvantages of each alternative;
  11. cannot make statements about what course of action a consumer should choose when a legal option is available, even if asked for an opinion;
  12. must clearly state that Marketer, its Affiliates and all employees, subcontractors, and agents are not attorneys, and neither Marketer representative or Marketer is providing legal advice;
  13. must refuse to answer questions about Bankruptcy and refer them to consult a Bankruptcy lawyer;
  14. must avoid creating the impression in the consumer’s mind that an attorney-client relationship exists between Marketer representative and the consumer;
  15. cannot secretly record phone calls;
  16. cannot state or imply that anyone assumes or pays consumer debts or loans money;
  17. cannot tell or imply to consumers that anyone will send a cease and desist letter to any creditor/collector and if asked to should state that a consumer should not advise any creditor/collector they are in a program or represented by a lawyer;
  18. cannot imply or otherwise suggest any time table under which any creditor/collector will be notified by telephone, facsimile, letter or e-mail and if asked must indicate depending upon a variety of factors it could take a long time before specific creditors/collectors would be contacted for the first time;

  19. cannot represent or imply that the program described in the Enrollment Package has been approved or endorsed by any local, state or federal governmental agency or official;
  20. must fully advise consumers of the cost of participation;
  21. cannot use any statistics or testimonials in any advertising or consultations (including website content) with consumers;
  22. cannot state that any consumer is pre-approved for anything;
  23. must instruct the consumer that they need to maintain a written log of all creditor/collector calls and
  24. must fully describe the refund policy and the termination process as well as the amount and timing of any refund.

[If a marketer actually complied with all those restrictions, what would they be able to sell the consumer that they would want to complete an enrollment package for?]

1.29 If any Service Provider affiliated with Processor accepts a Prospect to become a client, the corresponding Enrollment Package shall become a legal file of the Service Provider subject to all of the requirements of legal files of clients in a Service Provider and not the file of anyone else. Notwithstanding the foregoing, regardless if a Prospect becomes or does not become a client of a Service Provider affiliated with Processor, all Enrollment Packages shall remain Confidential Information subject limitations as more fully described below. This Section shall survive termination of this Agreement.

1.30 While the Parties hope that Processor through one or more Service Providers can make Debt Settlement services available in all fifty (50) states, Puerto Rico, the District of Columbia and other territories of the United States, Marketer agrees that Processor in its sole discretion may decide not to make services available in particular jurisdictions at any time without advance notice and could also make services available without advance notice in places where services are currently not available. As of the date this Agreement becomes effective, Processor works with Service Providers providing Debt Settlement services in all states and the District of Columbia with the exception of prohibited states as defined from time to time by service providers. Likewise, the Parties acknowledge that in certain states there may be restrictions on specific services that will be provided by the Service Providers with whom it works. Marketer understands that states may be eliminated or restrictions may be added or removed by Processor without advance notice. Marketer further understands that any Debt Settlement services provided for residents of Wisconsin will not include any actual verbal or written negotiations and that unless Marketer is bonded in compliance with Indiana law Marketer will not work with any Prospect from Indiana. [I guess services in Wisconsin are provide via ESP?]

1.31 The Parties agree that Processor acting in good faith shall be solely responsible for the interpretation of new developments regarding changes in the applicable laws, regulations, enforcement and regulatory matters that in Processor’s opinion require changes in Exhibits or in the way Processor handles its business operations and specific provisions contained in this Agreement. Marketer acknowledges that it should review any decision of Processor with its own compliance counsel. Marketer agrees to any change in this Agreement including any Exhibit necessitated by changes in the applicable laws, regulations, enforcement and regulatory matters including interpretations thereof. In such circumstances, Processor acting in good faith will then modify this Agreement and any applicable Exhibit to reflect the needed modification. In the case if the language in this Agreement including any Exhibit is not formally changed, the Exhibit will be deemed changed to reflect the change in the ability to provide services.

1.32 The entity that provides services for a particular consumer shall be solely responsible for the services it performs. Processor and Marketer shall each be responsible for the services each of them including their respective Affiliates, subcontractors, agents, or employees performs under the provisions of this Agreement. Marketer shall have no involvement in any of the services of any Service Provider or subcontractors of Service Providers. The Parties understand that with respect to clients of a Service Provider who started as Prospects identified by Processor, each Service Provider may also subcontract to one or more third parties who will provide their services under the direct supervision of the applicable Service Provider and lawyers licensed to practice in the particular jurisdiction where the consumer receiving the services resides. [How far up and down this chain of people does the marketer remain on the hook for?]

1.33 The Parties fully acknowledge that Processor itself is not a Service Provider. Although Processor or an entity having some affiliation with Processor may provide services for one or more Service Providers in accordance with the policies and procedures approved by the applicable Service Provider, on its own Processor does not practice law or provide legal advice at any time under any circumstance. Moreover, it is understood that any Service Provider where Processor provides services will not pay Processor or Marketer directly or indirectly referral fees for referrals to the Service Provider or in any way share in the fees generated by any Service Provider from any consumer. Rather, Service Providers will pay for other services that will include by way of example and not limitation: collection services, accounting and financial administration services. Fees paid by the Service Provider to Processor are on a fixed basis and not related to fees paid by clients of Service Providers for legal services. Should any regulatory authority ever take the position that the methodology utilized does involve referral fees or fee sharing, the Parties agree to modify this Agreement so that its activities in the applicable jurisdiction would not constitute fee sharing or payment of referral fees. If modification is not possible, the Parties agree to terminate participation under this Agreement in the particular impacted jurisdiction.

1.33 Each of the Parties agrees to fulfill their obligations under the provisions of this Agreement in substantial compliance with applicable local, state and federal laws, regulations and regulatory enforcement policies as modified from time to time. Marketer agrees that the legality of all marketing activities and processes and compliance with all local, state and federal regulatory agencies (Federal Trade Commission and others) of any activities in which it engages relating to this Agreement is the sole responsibility of Marketer. Marketer also agrees that if any Service Provider who is the intended beneficiary of Marketer efforts determines in its discretion that any marketing activities violate any applicable federal or state guidelines or applicable laws, regulations and enforcement policies as modified from time to time or rules relating to legal advertising or solicitation upon notice or any other applicable law or regulation, upon notification Marketer shall cease the alleged violating activities or modify them to the point where Processor based upon the opinion of the Service Provider who is receiving the benefits believes they comply. Violation of federal state guidelines, applicable laws, regulations, governmental enforcement policies, state advertising rules for lawyers, solicitation, or failing to maintain a compliant privacy policy individually constitute an immediate ground for termination of this
Agreement for Cause.

1.34 Marketer agrees to defend, indemnify and hold LegalAudix, LLC, affiliated lawyers, any person or entity coordinating or handling in-person face-to-face sales presentations and signing services, Processor, its affiliated entities, employees, independent contractors as well as any lawyer and Service Provider involved in any way with Processor or an affiliated entity of Processor harmless from any claim or liability whenever made or discovered, without caps or limitations and regardless of who makes the claim relating directly or indirectly from Marketer or anyone affiliated with Marketer and the provisions of this Article 1. Such liability includes by way of example and not limitation, legal fees, legal malpractice claims, refund of consumer fees, disciplinary actions from state bars and lawyer regulatory authorities, loss of income by lawyers, Service Providers and Processor internal costs of response and increased operating costs. Marketer understands that each violation constitutes for Cause grounds for immediate termination of this Agreement. The Parties also acknowledge that the indemnification obligation arises before any judgment when legal fees or other costs arise. This Section shall survive termination of this Agreement. Notwithstanding anything else set forth in this Agreement to the contrary, the Parties acknowledge that Processor may be a subcontractor of another party who in turn may be a subcontractor of yet another party. Consequentially, the particular data base and the Service Provider relationship could also be several layers removed. Even with such distance, the Parties all agree that all indemnification obligations herein apply regardless of the layer. [And here where this agreement gets absolutely crazy for any marketer that signs it. This section seems to impart a seemingly unlimited amount of financial liability on the shoulders and bank account of the marketer.]

1.36 The Parties also acknowledge that absent disclosure and authorization from the consumer or its authorized representative (excluding the Service Provider) under no circumstances will anyone hold consumer funds, pay debts of consumers or collect consumer funds. Under no circumstances absent authorization from the consumer or an agent of the consumer other than an applicable Service Provider or their agents will anyone other than a consumer have the ability to look into the consumer savings account established for accumulating funds to settle debts enrolled in a Debt Relief Services program or deposit or withdraw funds from that consumer savings account.

1.37 Notwithstanding anything set forth herein to the contrary, Marketer acknowledges once a consumer is accepted as a client by any Service Provider where Processor provides services, Marketer will not be able to obtain information on any fees paid to the applicable Service Provider, obtain any information or communication related to any consumer who is a client of such Service Provider, learn about the status of any consumer who is a client of such Service Provider or have any access to any portion of the Service Provider file. Moreover, if any consumer contacts Marketer regarding anything related to Debt Relief Services, Marketer will direct them to the customer service portion of the applicable Service Provider and will not instruct the consumer or provide any information other than the referral to customer service of the applicable Service Provider. Marketer understands that the extent of information it will ever be able to obtain is if a consumer has been accepted as a client, if a client has terminated its relationship with a Service Provider and if a client is performing its obligations for the Service Provider without any detail as to such obligations.

1.38 Processor agrees to provide Marketer a periodic report relating to the Prospects identified as entered into Processor’s record keeping system and how Prospects are performing. [How does this not contradict or violate the section above? What is performance?] The Parties understand and acknowledge that at no time will Marketer have access to the ability to view or receive any fee collection numbers or billings to consumers from any Service Provider. The Parties acknowledge that the purpose of these reports is to help Processor improve the quality of the Prospects, the quality of form completion and better identify candidates who have a chance of successful program completion.

1.38 Processor will sublicense or make a sublicense available through an authorized third party, to Marketer a contracting system that will assist Marketer in performing services under this Agreement. The sublicense shall be non-exclusive and limited to the period this Agreement is in effect and subject to the terms of the license Processor has on such system. Use of the provided contracting system by Marketer is required unless alternate arrangements are specifically authorized by Processor or the authorized third party sub licensor. The sublicense shall automatically terminate upon the termination of this Agreement. To the extent that Processor incurs a monthly fee per user per seat, such monthly fee shall be passed on to Marketer for its users and deducted from any amounts paid to Marketer as more fully described in Article 2. To the extent that Processor provides Marketer with access codes, if any employee or contractor who has been provided with an access code terminates their relationship with Marketer, Marketer shall immediately notify Processor. To the extent that there is no activity on a particular access code for the billing period and Marketer has not notified Processor or termination of access code, there shall be a fee of forty-nine ($49.00) per month assessed to Marketer, and if deemed necessary by Processor, deducted from amounts otherwise payable to Marketer. If the cost to Processor increases, the cost shall be passed on to Marketer. As of the date this Agreement becomes effective, the fee per user per month shall be twenty-nine ($29.00). Marketer agrees that the license is being provided “AS IS” and there are no representations or warranties of any kind associated with the contracting system and Marketer uses such system does so at its own risk.

1.40 NOTWITHSTANDING ANYTHING SET FORTH HEREIN TO THE CONTRARY, NEITHER MARKETER NOR ANY AFFILIATE MAY USE THE TERMS DEBT SETTLEMENT, DEBT ADJUSTMENT, DEBT NEGOTIATION OR PRO-RATING IN ANY FORM OF ADVERTISING (INCLUDING WEBSITE CONTENT) AND MUST REFERENCE DIVERSE SERVICES FOR FINANCIALLY DISTRESSED CONSUMERS. [So the marketer can't be open and honest about the services they are really providing. If there is something to hide then there is something to be very concerned about.]

1.41. Marketer agrees that if it works with any Affiliates, affiliated organizations, agents or subcontractors, it is fully responsible for their actions and inactions with respect to all of the provisions contained in this Agreement such as by way of example and not limitation representations that can be made, confidentiality, non-solicitation and privacy policies. Marketer also agrees to police compliance of all of its Affiliates and cease doing business with any Affiliate who does not comply with any of the provisions this Article or any other part of this Agreement with respect to anything relating directly or indirectly to this Agreement. Any action or inaction of an Affiliate is deemed to be an action or inaction of Marketer subject to the same requirements and limitations.

1.42 Notwithstanding anything else set forth herein, Marketer acknowledges that it has been advised and is required to retain the services of a competent compliance counsel so that they can comply with all of the obligations set forth herein. The costs of such counsel are the sole responsibility of Marketer.

2. Legal Fees, Revenue Shares and Payments

2.1 The Parties acknowledge that all fees and expenses collected from any consumer who becomes a client of any Service Provider are legal fees and expenses of that Service Provider. Neither Processor nor Marketer shall have any right or claim against such fees. Likewise, Marketer and Processor cannot and will not share in any fees collected by any Service Provider nor receive any referral fees from any Service Provider. Each Service Provider will set its fees for its clients within the limits and guidelines set by laws of various jurisdictions. The Parties further acknowledge that only a lawyer licensed to practice in a particular state where a consumer resides can set the legal fees and negotiate the fees charged by the Service Provider to a consumer. Marketer represents and warrants that at no time will it or any Affiliate ever collect any funds relating to Debt Settlement or Bankruptcy from any consumer.

2.2 Excluding amounts paid for sales presentations requested by Processor as described above, The amounts Processor will pay to Marketer under this Agreement will be a Revenue Share of the Net Revenue Processor receives from Service Providers for whom Processor provides administrative services related to Debt Relief Services where Processor is servicing clients of such Service Providers and is responsible for maintaining the data base of Debt Settlement clients for such Service Providers. [A share of revenue received from lawyers and law offices for servicing clients, interesting.] For this purpose, the term “Net Revenue” means the gross revenue received by Processor in a specified period from Service Providers for which Processor manages a data base in connection with processing services on consumers as set forth in the Enrollment Package minus any credits Processor has had to extend in connection with such services, minus the cost of file reviews by lawyers, minus refunds not funded through a reserve, minus the cost of educational courses completed by the consumer, minus the cost of newsletter subscriptions and minus the costs of conducting in-person face-to-face sales presentations. Net Revenue shall not be derived from any form of lead generation provided by Processor and will include applicable payments from all Service Providers with whom Processor services in connection with Debt Settlement and manages the data base of Debt Settlement clients for such firm. Processor will generally pay Marketer its Revenue Share once per week but no less frequently than one time per month. [And how much do all those deductions cost the marketer?]

2.3 The computation of the amount of the Revenue Share shall require Processor to determine the total amount of Enrolled Debt in the Debt Settlement data base Processor is managing for one or more Service Providers at specified points in time. [I thought the marketer was being paid a flat amount for completing an enrollment pack. What does the amount of debt have to do with anything, that is, unless the fee is based on the amount of debt.] Enrolled Debt is any debt a consumer has enrolled in a Debt Settlement program with a Service Provider who has Processor managing such firm’s data base of consumers. In order for a debt to be included as Enrolled Debt, the time it is under management by Processor the debt must no longer than and Processor must be successfully servicing such debt for a Service Provider. For this purpose, Processor is successfully servicing debt if the consumer is not in default and has not notified the Processor that it is terminating participation to file Bankruptcy or for any other reason. If a consumer adds or subtracts debt, for purposes of calculating Enrolled Debt, the date the consumer commenced in the applicable Debt Settlement program shall be the date of enrollment even though it is added or subtracted at a later date.

2.4 The computation of the amount of the Revenue Share shall also require Processor to calculate the amount of Enrolled Debt derived solely from the efforts of Marketer utilizing the same criteria set forth in Section 2.3.

2.5 The actual Revenue Share in a particular period shall be calculated as follows:
1. Processor shall first determine the qualified Net Revenue for the applicable period.
2. Processor shall next determine the total Enrolled Debt from all sources.
3. Next Processor shall determine the total Enrolled Debt derived solely from the efforts of Marketer.
4. Next Processor shall divide the number in Section 2.5.2 by the number obtained in Section 2.5.3.
5. Next Processor shall multiple the number obtained in Section 2.5.1 (Net Revenue) by the number obtained in Section 2.5.4.
6. Processor shall multiply the number obtained in Section 2.5.5 by the discount factor which in this case is (.80). The resulting number shall be the Revenue Share. The Discount factor is eligible for modification according to the following table:

CrediQuest Corporation and LegalAudix Marketing Services Face to Face Enrollment Agreement

2.6 As of the date of termination with cause as defined in Section 6, Marketer will no longer be eligible to

2.7 Marketer agrees to pay Processor for all travel and other expenses of Processor and related organizations including LegalAudix, LLC, if Processor or LegalAudix, LLC provide on site training, consulting services or legal services. Such amounts shall be due and payable upon receipt of an invoice. Processor at its sole option may deduct such amounts from amounts otherwise payable to Marketer. [And how much are you agreeing to pay?]

2.8 Marketer agrees to pay Processor a set up fee of $1,000.00. This fee is non-refundable and is due at execution of this Agreement.

2.9 Marketer agrees to pay the software related sublicensing fees set forth in this Agreement. Such fees shall be an adjustment to amounts otherwise payable to Marketer.

2.11 At the option of Processor, Processor may establish a reserve that will be used to offset refunds and other charge backs it incurs against its revenue in the future. The amount of such reserve shall be five percent (5%) of the amounts otherwise payable. To the extent that there is a Termination for Cause initiated by Processor as defined below, Marketer forfeits its right to any portion of the reserve. No interest is payable on any reserve.

2.12 If this Agreement terminates without Cause or for Cause initiated by Marketer, Marketer shall be entitled to receive compensation amounts described in Sections 2.2 – 2.6. subject to an automatic reserve of 5 percent. The termination reserve plus any other reserve shall be distributable to Marketer no earlier than twelve (12) months after the right to receive compensation under this Article ceases.

2.13 Marketer agrees that under the terms of the agreement between the consumer and the Service Provider, the consumer may have the right to switch into a Chapter 7 Bankruptcy and receive full credit for any fees that the consumer has paid. Marketer understands that the switch may have ramifications on the revenue received by Processor and therefore impact the amount of revenue received by Marketer.[So a consumer that was not appropriate for debt relief services or has a life event that leads to a chapter 7 bankruptcy, that decision to switch to a chapter 7 will hurt the income of the marketer.]

2.14 Marketer also understands that if it is able to handle completion of a detailed work package for Bankruptcy, preparation of a the “Means Test” for Bankruptcy and/or preparation of a draft of a Chapter 7 petition in Bankruptcy, Processor may be able to arrange for payment for the services at rates to be determined. [Why in the world is the marketer preparing a draft chapter 7 petition? That seems like the marketer is being paid for legal services even if the marketer is not an attorney.] Processor hopes to be able to develop a program that will allow Marketer to provide services for bankruptcy lawyers and be compensated in the case they provide services for consumers who do not enrol in the combined debt settlement/bankruptcy program.

2.15 Any amounts owed to Processor beyond the due date whether they are fees or reimbursements shall be subject to interest at fifteen percent (15%). Processor shall be eligible for all collection costs including legal fees and internal costs involved in collection activities and Marketer agrees to pay such amounts.

3. Terms and Termination

3.1 This Agreement will remain in effect until terminated by one of the Parties as set forth below. Notwithstanding the foregoing, unless there is termination with Cause, Marketer agrees it may not terminate this Agreement for a minimum of twenty-four (24) months. After the initial twenty-four (24) months, Marketer or Processor may terminate this Agreement upon at least sixty (60) days advance written notice with or without Cause.

3.2 Processor may terminate this agreement in writing at any time with cause. “Cause” is defined as substantial breach of this Agreement, the insolvency of a Party, the filing of a petition in Bankruptcy, the dissolution of a Party, or a default in payment agreement with is always deemed relevant. If Processor terminates agreement with cause, Marketer will no longer be entitled to any of the payments listed in Sections 2.2 – 2.6.

3.3 Processor has no control over any Service Provider and any Service Provider’s right to terminate any client. Processor has no right to terminate a client of a Service Provider without direction from such Service Provider. The Parties understand that a Service Provider will terminate any client if that Service Provider determines in good faith at any time there is fraud or misrepresentation, the client fails to make payments or comply with instructions, or for any other reason a Service Provider elects to discontinue representation. In addition, should there be a change in the laws, regulations or interpretive rulings impacting the ability of Processor or the Service Provider to offer services or governmental intervention, if the services are not being provided by a Service Provider, a Service Provider shall also have the right to terminate services to particular consumer. Consumers also have the right to terminate participation at any time.

3.4 Following termination, Marketer on behalf of itself and any related organization agrees that it may not use the text of any Exhibit to this Agreement, the text any part of the Enrollment Package or the text of any documents provided to Marketer in connection with this Agreement. Upon termination, the sublicense to the contracting system shall also terminate. This Section shall survive termination of this Agreement.

4. Ownership Rights

4.1 As between Marketer and Processor and excluding anything that becomes part of a legal file, both Parties agrees that each Party shall solely own and have exclusive worldwide right, title and interest in and to the process, systems, data, or materials supplied by or produced by the specific Party in the performance of marketing or services called for in this Agreement. Such ownership rights shall also apply to any materials or items created or conceived by each Party while this Agreement is in effect that relate to any services provided by each Party under the provisions of this Agreement.

4.2 All right, title and interest to any materials provided to one Party by the other are and shall remain the sole and exclusive property of the supplying Party or the entity that provided it to the supplying Party. Likewise, all property licensed or sublicensed under this Agreement shall remain the sole and exclusive property of the sub licensor/licensor. Notwithstanding the foregoing, the text in any consumer contract and related documents are owned by LegalAudix, LLC. If this Agreement terminates for any reason, Marketer agrees its right to use any portion of the text for any purpose automatically terminates and that it will not use any portion of the text in the future without the consent of LegalAudix, LLC.

4.3 If any materials are owned by third parties, neither Party as any ownership rights in such content. The content may not be sent to anyone unless they are participating in a program in which Processor provides services.

4.4 Marketer agrees that while this Agreement is in effect the text of any documents provided to it may only be used in connection with consumers who are being sent to Processor for possible inclusion in a program in which Processor provides services. If a person is not accepted in such a program, the documents may not be used or modified for use by someone else.

4.5 No Party will take any action that jeopardizes the ownership rights of the other, the rightful owner or the applicable Service Provider relating to the licensed/sublicensed software, software products and texts in documents. In addition, each Party will fully cooperate with any efforts of the other and/or any Service Provider to protect ownership rights.

4.6 Marketer understands that once a Prospect becomes a client of a Service Provider, Marketer has no control over the individual or any Service Provider’s use of the individual’s name for any other type of marketing activity in which a Service Provider may engage. Neither Processor nor Marketer shall have any right to any compensation with respect to such additional marketing activities.

4.7 The Parties agree that other than Debt Relief Services, from time to time, Processor or Marketer may offer other services to consumers who are provided Debt Relief Services as well as offer services to consumers who did not become clients of the Service Provider or who dropped out of a program. The arrangements for such services will be between the Processor or Marketer and the consumer, as the case may be, and not involve the other Party.

5. Confidentiality

5.1 Each Party will hold in complete confidence and not disclose, produce, publish, permit access to, or reveal Confidential Information of the other Party without the express authorization of the other Party unless such information is no longer Confidential Information. For purposes of this Article, Party also includes Affiliates, affiliated Debt Relief Services organizations, agents and entities related to, under common control, parent organizations of a Party, subsidiary organizations of a Party, lawyers providing services to clients and Service Providers.

5.2 For purposes of this Agreement, “Confidential Information” means all business information of any kind, including all derivatives and the terms of this Agreement. It may be furnished orally, visually, in writing, electronically, in tangible or intangible form. It includes but is not limited to all drafts of documents, existing or potential patents, potential copyrights, trade secrets, proprietary information, business plans, financial information, techniques, schematics, blueprints, records, prototypes, sketches, drawings, models, inventions, know-how, lists of current and potential customers, agents and suppliers, business forecasts, sales and merchandising, policies and procedures, the methodology of Debt Relief Services and marketing plans. Information of any client of a Service Provider is Confidential Information. Information of any client, customer or third party that would be Confidential Information if it was information of a Party that is disclosed to one of the Parties is also included in the definition of Confidential Information.

5.3 The identity and contact information of any lawyer affiliated directly or indirectly previously, currently or in the future with Processor and any affiliated Service Provider shall constitute Confidential Information. The identity of any person or organization involved in handling face-to-face sales presentations shall constitute Confidential Information Any information provided by CrediQuest, Inc or LegalAudix, LLC such as the methodology utilized to deal with issues relating to the unauthorized practice of law, fee sharing, referral fees, exemptions from the advance fee ban and holding of consumer funds shall likewise constitute Confidential Information. Likewise, the text of all policies and procedures, the Enrollment Package and documents provided through Processor shall also constitute Confidential Information. All information supplied by LegalAudix, LLC shall be treated as if it were Confidential Information supplied by one of the Parties.

5.4 This Article shall be inoperative as to any particular portion of information as to which the other Party has furnished documentary proof that such particular portion of the otherwise Confidential Information (i) is or has become generally available to the public other than as a result of a disclosure by the other Party or its agents, representatives or employees, or (ii) which becomes common knowledge within the industry thereafter, provided such knowledge is not obtained directly or indirectly as a result of a disclosure of information by the other Party or (iii) which is rightfully obtained from a third party not under a any obligation of confidentiality; or (iv) which the other Party can show was developed independently of the otherwise Confidential Information received.

5.5 Disclosure of Confidential Information is not precluded if such disclosure is in response to a valid order of a court or other governmental body of the United States or any political subdivision thereof; provided that the other Party will first give notice to owner of the Confidential Information so that the owner can make a reasonable effort to obtain a protective order requiring that the Confidential Information be disclosed only for limited purposes for which the order was issued.

5.6 Upon termination of this Agreement, each Party shall return to the supplier or destroy all Confidential Information not belonging to it.

5.7 Marketer agrees to maintain physical, electronic and procedural controls and safeguards to protect the Customer Information (as defined below) from unwarranted disclosure. These controls include, but are not limited to, the maintenance of appropriate safeguards to restrict access to Customer Information received from any consumer or either Party including employees, agents, subcontractors, service providers. For purposes of this Section, “Customer Information” means any record containing non-public personal information as defined in 16 C.F.R. §313.3(n) about consumer, whether in paper, electronic or other form that is disclosed or made available in connection with services relating directly or indirectly to this Agreement.

5.8 Marketer agrees that is will not attempt to circumvent processor to obtain same or similar Products offered by processor or access to programs offered by processor from any affiliate, Service Provider, employee, individual, or vendor used by Processor during the term if this contract or for a period of two (2) years following the termination of this contract.

5.8 This Article shall survive termination of this Agreement.

6. Entire Agreement

This Agreement constitutes the entire agreement of the Parties. It supersedes and replaces any prior contemporaneous oral or written understanding as to the subject matter contained in this Agreement and excludes all implied representations, conditions, warranties, and other terms. If Markter has executed any prior agreements with Processor, all such prior agreements are now null and void and fully replaced by this Agreement as of the date this Agreement becomes effective. Each Party acknowledges that it is entering this Agreement because of its own independent investigation and not because of any representation of the other Party contained herein.

7. Interpretation

If a court or arbitrator determines any individual provisions of this Agreement void or unenforceable in a final non-appealable decision by an arbitrator or court of competent jurisdiction, the validity of the remaining Agreement shall not be affected. Any provision deemed invalid or unenforceable in a final and non-appealable decision by an arbitrator or court of competent jurisdiction should be severed from this Agreement. In such a case, the Parties shall by mutual agreement substitute for the provisions concerned a provision considered equivalent in economic terms. This Agreement will be interpreted fairly as to all Parties and not in favour or against the Party who drafted it. The Article, Section and Subsection headings used herein are for convenience or reference only, are not a part of this Agreement and are not to affect the construction of, or be taken into consideration in interpreting, any provision of this Agreement. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provision of this Agreement, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver of any provision of this Agreement shall be binding on the Parties hereto unless it is executed in writing by the Party making the waiver.

8. Modification

Except in the case of the Exhibits and a change in an address for notices as set forth below modifications in operating standards as discussed above, changes in the ability to operate in a particular jurisdictions, modifications of or amendments to this Agreement shall be valid only when made in writing and signed by authorized representatives of both Parties.

9. Assignment

This Agreement may not be assigned without written consent of the other Party.

10. Applicable Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland without application of choice of laws.

11. Counterparts, Electronic Signature and Facsimile

This Agreement may be executed in counterparts. Each counterpart shall be treated as if it were the single original. A facsimile or electronic signature shall be treated as if it were an original signature.

12. Indemnification and Limitation of Liability

Each Party will indemnify, defend and hold the other, LegalAudix, LLC, all involved lawyers and Service Providers and all persons and organizations involved in handling or coordinating in-person face-to-face sales presentations and signing services harmless against any and all third party liabilities, losses damages, costs and expenses made against the other whenever discovered or arising as a result of any claim arising relating directly or indirectly to any of the provisions of this Agreement. The obligation shall arise as of the time indemnified party has an obligation to pay defense costs. Excluding claims from third parties and persons or parties who do not execute this Agreement, the limitation of either Processor or Marketer shall not exceed the greater of the amount paid by insurance or One Hundred Thousand Dollars ($100,000). Any obligation of indemnification shall be subject to immediate notification and full cooperation of the indemnified Party. Indemnification shall not apply with respect to illegal acts and negligence of the indemnified Party. In the case of fault by both Parties, liability shall be apportioned in accordance with fault. The indemnified party will not have the right to select counsel unless they pay the cost of that counsel. THE FOREGOING WILL APPLY REGARDLESS OF THE BASIS OF LIABILITY OR THE FORM OF ACTION. THE ESSENTIAL PURPOSE OF THIS SECTION IS TO LIMIT THE POTENTIAL LIABILITY OF EACH PARTY AND ITS AFFILIATES ARISING OUT OF THIS AGREEMENT. THE PRICES OF THE SERVICES AND THE COMMERCIAL TERMS OF THIS AGREEMENT REFLECT THE FOREGOING ALLOCATION OF RISK. THIS SECTION IS SUBJECT TO ANY LIMITATIONS OR EXCEPTIONS UNDER APPLICABLE LAW AND TO ANY OTHER PROVISIONS IN THIS AGREEMENT THAT PROVIDE TO THE CONTRARY. The right of indemnification shall extend to any Service Provider or lawyer affiliated with such firm where Prospect files are forwarded by Processor and will include but not be limited to refund of consumer fees, claims made by a state bar, supreme court, attorney state or federal regulatory authorities against any lawyer or Service Provider relating directly or indirectly to actions of Marketer, their employees, subcontractors, service providers, agents or affiliated organizations without limitation.

13. Dispute Resolution

13.1 Any proceeding or dispute relating directly or indirectly to this Agreement shall be submitted to final and binding arbitration before the Judicial Arbitration and Mediation Service (“JAMS”) before a single arbitrator in Maryland. All arbitrators shall have expertise in the subject matter of the dispute. The arbitration process including the selection of an arbitrator, exchanges of requests for information and the arbitration hearing, shall be completed within sixty (60) days following the initiation of arbitration. The actual arbitration hearing shall be limited to one day and the arbitrator(s) shall issue a written opinion specifying the reasons for the decision with ten (10) days following the arbitration hearing. Judgment upon any arbitration award may be entered in any court having jurisdiction located in Maryland. This provision will be self-executing and in the event anyone fails to appear at any properly noticed arbitration proceeding; an award may be entered against such party notwithstanding such failure to appear. Each Party shall be responsible for their own legal fees. In the event of any litigation or arbitration hereunder, the arbitrator or court shall award costs and reasonable attorneys’ fees to the prevailing party.

13.2 The Parties agree that any breach of the obligations under this Agreement which is otherwise not subject to remedy by monetary damages that will cause irreparable harm will be entitled to injunctive relief and other forms of equitable relief in addition to all other remedies provided in this Agreement or available at law, in any court of competent jurisdiction.

13.3 Any claim must be submitted to arbitration within the earlier of twelve (12) months of termination of this Agreement or twelve (12) months from the date of discovery or shall be void.

13.4 All remedies available to either Party for one or more breaches by the other Party are and shall be deemed cumulative and may be exercised separately or concurrently without waiver of any other remedies.

13.5 This dispute resolution requirement and this Article shall survive termination of this Agreement.

14. Notices

All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of delivery if delivered personally to the Party to whom notice is to be given, or on the third (3rd) day after mailing if mailed to the party to whom notice is given, by first class mail, registered or certified, postage prepaid, and properly addressed as shown on the first page of the Agreement. The address for notices unless changed is the address set out in the signature block of this Agreement. Either Party may change the address to which notices to such Party are to be addressed by giving the other Party written notice of such change in the manner herein set forth.

15. Third Party Beneficiaries

Except as set forth herein and in the case Processor subcontracts any portion of its rights or obligations hereunder as well as applicable Debt Relief Services organizations and Service Providers and lawyers who are involved with files or consumers coming from Processor or LegalAudix, LLC and any person or organization coordinating or handling in-person face-to-face sales presentations and signing services none of the provisions of this Agreement shall be for the benefit of, or enforceable by, any third-party beneficiary. In the case of the exceptions noted at the beginning of this Section, the impacted party shall be a third party beneficiary under this Agreement.

16. Independent Contractor Status

The Parties are and shall be independent contractors to one another, and nothing herein shall be deemed to cause this Agreement to create a, partnership or joint venture between the parties. Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between personnel of one Party and the other.

17. Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the Parties, their successors and assigns. Not assignable unless authorized in writing by both Parties.

18. Effective Date

This Agreement shall be effective as of the date the last Party signs it.

19. No Practice of Law

Neither Marketer nor Processor shall perform any services that are proscribed to a lawyer by statute, court rule, administrative rule or regulation, controlling authority, the applicable rule of professional conduct of the applicable Jurisdiction, or this Agreement. [Even though the agreement says the marketer may prepare a chapter 7 bankruptcy petition and be compensated for it.] By way of example, but by no means an exhaustive list, the Parties agree that neither Marketer nor Processor shall be responsible for any of the following: establishing an attorney-client relationship; establishing the amount of a fee to be charged for a legal service; or rendering a legal opinion or conclusion of law. No attorney-client relationship shall be established between any consumer and Processor. No attorney-client relationship will be established unless and until any proposed contract is accepted by a lawyer licensed to practice in the jurisdiction where the consumer listed in the proposed contract resides approves the consumer to be a client. The Parties shall make this fact clear in all communications with consumers. The Parties agree to take all reasonable measures to ensure clients, courts, and other lawyers are aware that Marketer and its staff are not licensed to practice law.

20. Execution

THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT; THEY UNDERSTAND IT AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS. THE PARTIES FURTHER AGREE THAT THIS AGREEMENT IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES. EACH PARTY AS WELL AS EVERY INDIVIDUAL SIGNING THIS AGREEMENT REPRESENTS AND WARRANTS THAT THEY ARE FULLY AUTHORIZED AND EMPOWERED TO ENTER INTO THIS AGREEMENT.

IN WITNESS WHEREOF, the Parties by their duly authorized representatives have executed this
Agreement.

If you skip down to Exhibit B, that is where you will find the most interesting stuff.

Protocol
Exhibit A
Debt Settlement – Minimum Requirements

Hardship:

  • Background information on how/why and month/year the Consumer has had a financial setback or hardship is essential to the negotiation process. The hardship story usually is either due to a loss of income, medical problems or because of a divorce or separation. There could be other reasons. There must be a genuine hardship or a consumer will not be accepted.

    Budget

  • Affordability
    o Must be able to afford program payment

  • Buffer
    o Must not have more than the greater of $250 or 2% of net income available as disposable income.

    Program Limits and Terms

  • Minimum debt load
    o $7,500

  • Minimum Creditor Balance
    o Min. $500

    Creditor Account Specifics

  • UNSECURED
    o NO Collateral was put up against the loan; No appliances, vehicles, furniture or anything else which may be taken away if payments are not made.

  • ALL ACCOUNTS MUST BE MATURE DEBT (At least 3 monthly payment have been made. 1 year old recommended)
  • Account Balances
    o The min. is $500
    o Combining accounts

  • If accounts are listed with the same collector, the balances may be less than $500 PROVIDED THAT; Each account must be at least $200 and total balance of these accounts must be at least $500.
  • Multiple Accounts
    o If client has multiple accounts with the same creditor all accounts will have to be included on
    the program, or the client will have to keep all of the accounts off.

    NOT ALLOWED ON PROGRAM
    o Credit Unions
    o Summons / Judgments / Garnishments – If ANY account is in litigation or has a court date pending and/or summons on the account, or the client is already being garnished, that particular account CANNOT be included in the program.
    o Student Loans – (Privately held student loans require an additional waiver)
    o Mortgages or Equity Lines
    o Timeshares
    o Back Rent
    o Pay Day Loans
    o Timeshares
    o Casino Debt
    o Automobile Loans: if the Vehicle is still in possession of the consumer
    o Title Loans
    o Individual Loans: Any type of loan that is owed to an individual person
    o Secured Loans: Any loan that is backed by some sort of collateral
    o Aqua Finance (Water System)
    o CASH CALL
    o Internet Loans of any kind
    o IRS or State Government Debt
    o Military Star (AAFES): Creditor will Garnish Pension
    o Any Type of Military Lender
    o Insurance (car, home, or any other type)

  • SUMMONS/LITIGATION/GARNISHMENTS
    o If ANY account is in litigation or has a court date pending and/or summons on the account, or the client is already being garnished, that particular account CANNOT be included in the program.

    WAIVERS

    Some creditors or circumstances require supplementary waivers in addition to the contract. These waivers are as follows and must be completed at the time of enrollment.

    o Declaration of Age – Physical Signature required of any client age 65+

    o Commanding Officer Letter – Physical Signature required from the superior officer of any client in active military, law enforcement, or having a government security clearance.

  • WAIVER OF LIABILITY for Commanding Officer Letter – Required in place of Commanding Officer Letter if superior officer will not sign and client still wishes to enroll.

    o WAIVER OF LIABILITY for Business Debt – required for any client enrolling business debt. (Business must be no longer in operation)

    o WAIVER OF LIABILITY for Equity – Required if a consumer insists on placing an account for a creditor who also holds the title to their mortgage or car loan. It is not recommended to add this debt.

    o WAIVER OF LIABILITY for Hard Money Lender – Required for any client enrolling an account with CitiFinancial, Household Finance, Beneficial Finance, Lendmark, or any other similar creditor.

    o WAIVER OF LIABILITY for Private Student Loan – Required for any client enrolling a PRIVATELY held student loan. This debt is negotiable, however the success varies greatly. It is not recommended to add this debt.
    “Common” Creditor Provisions

  • Mortgage /Car Loan
    o If client has a vehicle loan or mortgage thru the same creditor, as they are including in the program, they cannot include that creditor in the program.

  • BANK ACCOUNT
    o If a consumer has a credit card, credit line or any unsecured line of credit, and that consumer has an active CHECKING/ SAVINGS account with the issuing bank of the unsecured debt, they have 2 options:
    1. The consumer can include the unsecured debt into the program provided that they CLOSE their checking/savings account with the issuing bank and open a new checking/savings account with a new bank.
    2. Or the consumer CANNOT, include the unsecured debt in the program due to the fact that most banks will place a freeze on the bank account to collect funds on the delinquent amount owed on the unsecured debt.
    Special Accounts

  • Beneficial / Household Finance/ American General / CitiFinancial
    o Many times they require collateral (TV, DVD Player, Furniture) BE SURE TO CHECK!

  • Automobile Deficiencies (Repo)
    o Provided that the automobile has been repossessed by the issuing bank or 3rd party agency the deficiency balance may be placed onto the program.

  • Medical/Mental Health Debt
    o Provided that the debt is at least $1,000 per creditor AND 90 days (3 months) delinquent.

  • Utility Bills
    o Provided that the debt is at least $1,000 per creditor AND 90 days (3 months) delinquent.

    Military / Law Enforcement / Security Clearance

  • ACTIVE
    o If client is in law enforcement, career military, or have a security clearance, they MUST have a signed waiver from superior officer stating a debt settlement program will not affect their rank or clearance. If not, they cannot join program.
    o NO Military creditors will be allowed on the program for these clients.

  • INACTIVE
    o NO waiver required
    o NO Military Creditors Allowed

  • RESERVE
    o NO Waiver required
    o NO Military creditors will be allowed on the program for these clients.

    Debt Management – Minimum Requirements

    Program Benefit:

  • The main benefit of a Debt Management Plan is the reduction in interest rates. The consumer must therefore receive an overall reduction in interest rates which will provide the consumer with a reduced overall payout amount.

    Budget

  • Affordability
    o Must be able to afford program payment

  • Buffer
    o Must not have more than the greater of $250 or 2% of net income available as disposable income.
    Program Limits and Terms

  • Minimum debt load
    o $3,000.00

  • Account Balance
    o $250

    Creditors

    American Express
    o ELIGIBLE ACCOUNTS

  • US Consumer Charge Cards
  • Green, Gold, Platinum
  • US Consumer Revolving Credit accounts
  • Optima, Blue, Delta, Costco

    o INELIGIBLE ACCOUNTS

  • Corporate Cards
  • Small Business Accounts
  • Any account previously enrolled
  • Any account that has less than 9 months tenure
  • Shop Rite
  • Bank of Hawaii
  • Special Purchase
  • Travel accounts including American Express Delta Skymiles

    o Guidelines

  • All eligible AMEX accounts must be added in order for any of a client’s American Express accounts to be approved.
  • Client MUST never miss any payments.
  • Client MUST change due date prior to 1st payment if necessary. (15 days after debit date)

    Bank of America
    o INELIGIBLE ACCOUNTS

  • Commercial Accounts
  • Government Accounts
  • Business Accounts

    o ALL accounts must be placed on DMP

  • ONLY 1 account over $200 may be left off. Credit Limit must be $5,000 or less.
  • All accounts under $200 may be left off.
  • B of A CANNOT be the only creditor on the DMP.
  • Collection, medical and legal accounts are not considered valid DMP accounts. There must be other revolving credit card accounts or loans on the DMP.
    ** If client does not wish to add all revolving debts, B of A accounts must be removed.

    o Co-Client / Joint Accounts

  • The owner of the B of A account must be on the DMP.
  • Middle initial is required.
  • If the B of A account is jointly held, both cardholders must be listed on the DMP.
  • Only 1 emergency account can be left off the plan between the 2 of them.
  • All other accounts (even if held singly) have to be on the DMP.

    CitiFinancial (Branch Accounts)
    o Benefits are hit or miss. Some branches offer benefits, others do not.

    Cash Call
    o DOES NOT PARTICIPATE. DO NOT ADD

    Credit One Bank (First National Bank of Marin)
    o DOES NOT PARTICIPATE. DO NOT ADD

    Dell
    o DOES NOT PARTICIPATE. DO NOT ADD

    GC Services
    o DOES NOT PARTICIPATE. This is a collection agency. To add you must add under the ORIGINAL CREDITOR!
    HSBC RS accounts
    o Stores such as Best Buy, Sony, Suzuki, Kawasaki, etc.

  • Creditor names end in “HSBC RS”
    o Many times these accounts have promotional low or no interest offers.

  • These MUST be removed prior to a proposal being accepted

    Account Types

    Business Accounts
    o Most Creditors DO NOT accept business accounts specifically:

  • American Express

    Student Loans
    o DO NOT PARTICIPATE. DO NOT ADD

    Exhibit B

    A – INTRODUCTION
    Comment: You cannot deviate from the substance of this Script without authorization from the lawyer admitted in the jurisdiction of residence of the applicable consumer. While you may paraphrase, you may not deviate from the substance. The reason no deviation is permissible is to prevent anyone from making a claim that a sales consultant is engaged in the unauthorized practice of law, or engaged in product tying of any kind. The Script has been approved by each lawyer who is affiliated and involved. The FFS and DR can educate any consumer regarding their finances and is not related to referral into any other debt relief service. [Not sure what FFS and DR stands for.] Please also remember that we want to help people who are in financial distress and are providing a service. We can help many people with debt relief services however, not every consumer requires or is qualified for debt relief services. Referrals into these programs are free referrals incidental to the sale of the FFS and DR. There are three separate options for debt relief services; Debt Settlement, Bankruptcy and enrolment in a debt management plan/credit counselling plan. The consumer must meet the criteria for any option you present to them. Also remember the form of Debt Settlement offered comes with a conversion feature to Chapter 7 Bankruptcy where the consumer will get credit for all fees against the cost of the Chapter 7 Bankruptcy.

    [How would any reasonable person not see this as a sales presentation that occurs over the phone and in advance of any face-to-face presentation designed to wrongfully circumvent FTC rules.]

    INTRO:

    • Thanks for calling ___(company)___, my name is ______ I’ll be your consultant, how are you today?
    • May I ask who am I speaking with? It’s great to meet you today__(Client) . In case we get disconnected, what is the phone number that you are calling from?
    • How did you hear about us? (track source of call for marketing) What prompted you to look for help today? (listen for hot buttons; probe to learn level of need; why prospect needs help)
    • __(Client) , my goal today is to learn as much as I can about your situation so I can help you with the program that is right for you, OK? Okay, __(Client) , like I said more I know about you, the more I can help you. Let me just ask you a few specific questions about your accounts:
      • Do you read and understand written English and are you comfortable entering into a transaction in English?
      • What would you estimate the total amount of debt you owe on you unsecured accounts to be? That’s credit cards, store cards, medical bills and collection accounts.
      • All together, how much are your creditors asking from you each month as payment?
      • How much can you afford to pay each month?
      • Are you struggling to make your minimum payments?
          Are you behind on your payments? IF YES- How far past due are you? Are you getting collection calls/letters? Are any of your accounts with collection agencies or Service Providers? Have you ever considered filing bankruptcy?

          • Are you currently employed? IF NO -Do you have a source of income to make some kind of a monthly payment? IF NO -END CALL

    OK, to set a baseline for our conversation, there are five options for people dealing with financial issues like yours. 1 – Make minimum payments to your creditors at high interest rates for the next 20-30 years. Clearly this an expensive option, and since we are speaking now, this is probably not working out very well. 2 – You can obtain a consolidation loan. Banks are not readily lending money anymore so most of the people that I speak with do not qualify for this option. In addition, all you are really doing is trading several bills for one bigger bill that still has a high interest rate. [This is not true. Places like LendingClub.com do exist for unsecured debt consolidation at lower interest rates.] 3 – You could file for bankruptcy. It is more difficult to file since the new bankruptcy laws were passed. Many people also simply do not want to file for various other reasons including the fact that it is public record and the negative effect on your credit for 7-10 years. [This scare message totally overlooks comparing the impact of bankruptcy versus the impact of the debt relief services being sold.]

    Let me explain the two other options that could really help someone in your situation.

    • The Debt Management Plan offers:
    • One place to pay, and one reduced payment to make each month for all your unsecured debts.
    • Your lowered monthly payment is automatically deducted from your bank account each month on a new date that you get to choose and sent to each of your creditors.
    • In exchange for this, your creditors will agree to a reduced payment each month, plus they will reduce our interest rates and stop charging late and over limit fees. Also, most major creditors will bring and past due accounts back to a current status without having to make up the amount you are behind.
    • As your program goes on some creditors will pay off more quickly and their payment is then sent to
      the remaining creditors. It’s like a domino effect as each creditor starts getting more money until ALL of your debts are paid off.

    • Since we are able to work with your creditors in this manner to pay back your debt on better terms, you won’t just be making interest payments, but you’ll actually be paying down the debts in anywhere from 2-4 years!

    The other option is Debt Negotiation

    • In this program you get one even lower payment each month for all your unsecured debts.
    • Instead of sending monthly payments to your creditors those funds are allowed to build up in an account that you own and as the money grows we make offers to your creditors to settle each balance for less than you owe.
    • This entire process generally takes from 2-4 years and allows you to pay back less than you owe.
      Based on what you have told me about your situation, I would recommend the Debt Management Program
      (DMP) – OR – Debt Negotiation Program. [So all these options basically come down to these two options.]

    Does that sound like something that could benefit you? Great! Let me give you a little more detail!

    DEBT MANAGEMENT PLAN (DMP):

    • As I mentioned earlier, we are going to reduce your monthly payment considerably. At the same time, and more importantly, we’re able to reduce your overall interest on your debts. That means your new lowered monthly payment is going to be more productive for you. More of your money will pay down the actual debt each month, instead of just spinning your wheels, wasting time and money on high interest and fees.

    If Client is PAST DUE…
    Now, since you are past due you will typically receive some additional benefits on this program.

    • One great benefit of the program is that our team will step in and handle the harassing calls and letters that we know you are receiving. Short term, we even provide you with a toll free number that you can pass along to your creditors. In the future if you receive ANY harassing calls from them whatsoever, you will simply refer them to us.
    • After your creditors receive their third payment, Client, most major creditors will re-age your accounts, which means they will be brought back to a current standing. This should help improve your credit over the course of the program.
    • Most creditors will stop adding late fees and over-limit fees to your accounts as well, which will also help you pay them off much more quickly.
    • Great…now client, there are a couple of things you need to keep in mind. Each creditor has its own guidelines on the program. Some have lower interest rates than others, some give you benefits right away, while others may wait until you make 3 (three) consecutive payments on the program before offering benefits.
    • Remember that getting clients out of debt is our first and only priority. Our team of experts works to enable a fresh financial beginning for individuals and families with out of control debt problems. We’re aware of the importance of credit in people’s lives and also the strain that debt can cause. We have helped many thousands of clients across the nation and we are ready to help you too!

    In short, we pay all of your bills for you, with your money, under much better terms. Over the course of the program, you will literally save 1000’s of dollars in interest.

    (Client), I know I threw out a lot of information at you. What questions can I answer for you?

    DEBT NEGOTIATION PLAN:

    • As I mentioned earlier, the Debt Negotiation Plan is the quickest way to get out of debt without filing bankruptcy. This program is not credit repair. No one can legally remove accurate negative information from your credit report. However, it offers a way for you to pay back only a fraction of what you owe which means you can seek comfort in knowing that you have done everything possible to satisfy your debts and avoid bankruptcy.
    • Although I am not a lawyer, all of the explanations I am providing to you have been approved by a lawyer admitted to practice in your state. We are an enrollment center for variety of attorneys that specialize in debt negotiation. Your case will be assigned to an attorney licensed in your state. The attorneys and professional and experienced negotiators will work with your creditors to get your debts reduced as much as possible. Many of the negotiators are former collectors themselves so they know exactly how to handle your accounts.
    • Results vary for each person but a typical client will only pay back a fraction of what they owe by completing our program.
    • As you are making your payments we send legal documentation, including a limited power-of-attorney form to your creditors. This will explain that you are on our program and will discourage them from calling you directly.
    • Always know that we work for YOU, not the creditors. In this program you have an advocate who is working for you. The attorney is not paid by the creditors and is not supposed to be neutral like a trustee in bankruptcy.
    • Let me get more specific and walk you through the “nuts and bolts” of the program.
    • Shortly we will work out a monthly payment that fits in your budget. This payment must be made each month on a new schedule you get to choose. These payments will be placed into your new settlement savings account, which is FDIC insured for your protection, and the funds held in that account belong to you.
    • As your money grows over time the firm will be working on your behalf to settle these accounts for less than you owe. The amount of time to settle each debt varies but typically we can start making offers when you have saved up 20-40% of any given balance.
    • I want to make you aware there is a risk that a creditor could file a lawsuit or a claim against you. Considering the amount of money that you can save this might be a risk worth taking. As you know, there is risk in every investment. Participation will also negatively impact good credit. In your situation, would you agree that getting out of debt as quickly as possible is the most important thing?
    • While enrolled in the program, you may receive phone calls from creditors wanting payment or even threatening you. Once you join the program we will legally have your permission to contact your creditors. If you have a home phone, we will also be shipping you our Call Guard module to help you out with the collection calls. You just plug the module into your home phone jack and when a collector calls, you simply press the star key and hang up. The system then takes care of directing these annoying collection calls to us and we handle them for you while you are on the program.
    • As an additional layer of security for you, the debt negotiation program also includes chapter 7 bankruptcy conversion. Life is unpredictable and sometimes, despite a consumer’s best efforts, their situation may worsen through illness, unemployment or many other reasons. In these cases if you can no longer afford to make your payment, the bankruptcy conversion option will apply any fees that you have paid dollar-for dollar toward the cost of a bankruptcy through the firm. This is really a comforting option, even as a last
      resort.

    In short, we SETTLE all of your bills for you, with your money, under NEW, NEGOTIATED terms. You will pay a fraction of what you actually owe. [So which solution do you think people are going to jump for based on this script?]

    (Client), I know I threw out a lot of information at you. What questions can I answer for you?

    Collect Information:

    Client, we can work up that new low monthly payment and get you started today if you have all of your creditor information with you. Do you have your creditor information with you now? If you have a moment we can pull a FREE credit report off of www.annualcreditreport.com so that we can see exactly who you owe and how much. IF YES- take personal/creditor/budgetary information; if NO; take personal information and set CB appt)

    IF NO CREDITOR INFORMATION:

    • Grab a pen so you can write this down. I’m going to need you to call me back ASAP, and we will use that information to work up your low monthly payment. It has been busy today, so that you’re not on hold when you call back I’ll give you my direct line, it’s ______________extension _______. I leave the office tonight at _______ so please do your best to gather up your bills we don’t want to wait. OK, I will need the following info from you.
      • Names of all the creditors
      • Account #’s
      • Most current balances
      • Minimum payment due (what it takes to bring current)
      • How many months behind you are
      • An email address (or fax #) so that I can send you your documents right away

    You can get all of this info from your most recent statements; or you can call your creditor’s 800# or go online and get the information from them directly. Gather those together ASAP.

    How long do you think it will take you to get back to me? Can you get that info together today or tomorrow? (note account for CB time; create urgency). If I don’t hear from you by then, I will call you. [Good thing this isn't selling the program prior to a face-to-face meeting. But wait, needing to create a sense of urgency, it is a sales call.]

    Payment & Fees:

    DMP – CONSOLIDATION

    • Ok, I’m showing that you have ____creditors with a total amount of $_____in unsecured debt.
    • I have some great news here!
    • With us, your new low monthly payment under the program is only going to be $_____ which includes your monthly service fee and your member’s benefits program with $1500 in unemployment insurance, and all kinds of money saving coupons and programs. You can cancel this at any time but I would absolutely recommend using it to see the money you save.
    • The full benefit of this program is that you are going to be completely debt free in approximately______ months/years.
    • It makes me feel good to see someone like you save this amount of time and money on this program.
    • The first payment you make is your education and consulting fee to set up your account. There is a large amount of work that we need to do to set up an account of this size under far better terms. The first payment is used to enroll you onto the Debt Management Program, contact your creditors; handle any creditor inquiries; and process your monthly debit, and is not sent to your creditors. [This is clearly not a process that is permitted in many, if not all jurisdictions.]

    DSP – SETTLEMENT

    • I’m showing that you have ____creditors with a total amount of $_____in unsecured debt.
    • I have some great news here, grab a pen!
    • With us, your new low monthly program payment is going to be ONLY $_____ (Monthly Amount) which includes all of your fees built right in. For the first (1 or 2) months your payment will be ______.
    • Your payment includes a monthly retainer fee to the Service Provider for the services provided each month. This is collected after services are performed each month, so you do not pay anything until services are performed. [Huh?] In the first month an attorney will review your file and perform a thorough quality assurance review. In the succeeding months the fees cover the cost of your welcome package, creditor correspondence, your call guard, the handling of inbound calls and letters, review for rule violations and the periodic review of your creditor files for the timing of settlements.[And how much does that cost? Prospect is not told.]

      It will be reassuring to know that your $______ monthly payment includes everything that we discussed as the Service Provider supports you towards becoming debt free. It makes me feel good to see someone like you save this amount of time and money in our program.

    Collect Budget Information (use Budget as sales tool if prospect cannot afford payment)

    (Client), the last step in the process is to complete a quick household budget and financial analysis. Your creditors will require this info, and of course it will be used to determine if you are qualified for the program.

    The Close [Ah yes, the close.]

    • The last thing we need to do is set-up your monthly payment schedule. This is when we will automatically debit from your bank account each month. Now, the sooner we get you started the sooner we can really help you. Today is the (today’s date); we can set you up as early as 4 business days from today. Does that work for you? (1st pay within 21 days).
    • Next, let’s go ahead and collect your banking information so that we can process the automatic debit each month. (Input Checking/Savings account number and 9-digit ACH routing number).
    • In order to complete your enrollment we have a two step process. The first step is for you to confirm all of the information that we put together for your program. I can send these documents directly to your email address so you can sign off on them electronically. This only takes a second and will ensure that everything is correct when we put your paperwork together.
    • (IF FAXING) Review each of the pages and fill out and sign and date where needed. After you have finished I need you to SEND BACK TO ME TODAY ALL of the original pages. My toll free fax number is ______________. I will fax it now. Give me a call as soon as you fax it back so I can check everything over and walk it over to processing. My goal is to get everything going for you today. [Urgency, the close, send it back today, very interesting.]
    • The final step of your enrollment is to schedule a brief face-to-face presentation to ensure you understand the program, as well as sign your program documents. Your success on this program is our only concern so I’m going to transfer you over to our quality assurance department and they are going to ensure that your paperwork is put together correctly and schedule your face-to-face appointment at your convenience. While I transfer you, think of a 15 minute window in the next 2 days that will be convenient to have this quick appointment.
    • Congratulations! Should ANY questions arise going forward; please don’t hesitate to call. I’m here to help you. If you know of anyone else that you think I can help, have them call me right away. We are on a mission to help as many families as we can get out of debt. Please hold the line and good luck on the program! This will only take a moment.

    QUALITY ASSURANCE: 877-737-1985

    Exhibit C
    CONSULTANT DECLARATION DEBT SETTLEMENT

    The undersigned certifies under penalty of perjury that the following is true and accurate:

    1. I made a presentation to the consumer listed on the above Contract for Services and Engagement Agreement.
    2. During that presentation, I did not deviate from the script provided to me and approved by the lawyer admitted to practice in the state where the consumer stated he or she lived. If I did deviate, I had the deviations approved by a lawyer admitted to practice in that state.
    3. During my presentation, I explained all of the possible alternatives to debt settlement/Debt Settlement including making, minimum payments; credit counselling, debt consolidation as well as two forms of Bankruptcy.
    4. I did not make any guarantees or promises as to the actual percentage savings on any settlement, the length of time needed to complete the Program, that a creditor would be willing to negotiate an enrolled debt or that a creditor or someone acting on behalf of a creditor would not file a lawsuit or initiate arbitration. In each instance, I told the consumer that everything was a good faith estimate that could vary based upon a variety of factors.
    5. I explained all of the risks of participation in a debt settlement program including the impact on credit rating, creditor calls and possible litigation.
    6. I explained that the Service Provider was not obligated to provide any form of legal representation other than debt settlement/forensic services regardless of what happened.
    7. I explained all of the fees as well as the procedure to terminate participation and the refund policy.
    8. I explained that a consumer could not be enrolled in the Program unless the file passed through all components of underwriting and was also approved by a lawyer licensed to practice in the consumer’s state of residence.
    9. I explained that although the consumer was contracting with a Service Provider, individuals who were not lawyers would be providing many of the services under the supervision of a lawyer.
    10. The consumer listed on the above documents informed me that he or she understood all of the information presented and was entering the Program freely and voluntarily. From my perspective, I believe the consumer(s) understood everything and was (were) not under duress or any undue influence.
    11. I understand that a lawyer will rely on my representations in making his or her determinations to approve the consumer for participation in the Debt Settlement program. – Source
    CrediQuest Corporation and LegalAudix Marketing Services Face-to-Face Enrollment Agreement by
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    About Steve Rhode

    Steve Rhode
    Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
    • Andy Faria

      If Al Capone had an agreement for all of his “affiliates” it would look similar to this. I can’t believe some attorney somewhere actually sat down, wrote this up, and believed the bullshit he was writing.

      My favorite part:
      Any information provided by CrediQuest, Inc or LegalAudix, LLC such as the methodology utilized to deal with issues relating to the unauthorized practice of law, fee sharing, referral fees, exemptions from the advance fee ban and holding of consumer funds shall likewise constitute Confidential Information.

      My Translation:
      Where going to let you in on how we smuggle drugs in from Mexico, distribute it nationwide, and occasionally shoot people that get in the way. We believe this stuff is all legal for us and you are required to keep your mouth shut about why we think that way.

      Whats sad is that somewhere right now some idiot is sitting down and actually signing this agreement.

      I’m gonna go way out on limb here and predict that this operation isn’t around much longer.

    • http://northeast-properties.com Andy Faria

      If Al Capone had an agreement for all of his “affiliates” it would look similar to this. I can’t believe some attorney somewhere actually sat down, wrote this up, and believed the bullshit he was writing.

      My favorite part:
      Any information provided by CrediQuest, Inc or LegalAudix, LLC such as the methodology utilized to deal with issues relating to the unauthorized practice of law, fee sharing, referral fees, exemptions from the advance fee ban and holding of consumer funds shall likewise constitute Confidential Information.

      My Translation:
      Where going to let you in on how we smuggle drugs in from Mexico, distribute it nationwide, and occasionally shoot people that get in the way. We believe this stuff is all legal for us and you are required to keep your mouth shut about why we think that way.

      Whats sad is that somewhere right now some idiot is sitting down and actually signing this agreement.

      I’m gonna go way out on limb here and predict that this operation isn’t around much longer.

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