Latest Posts
Home > Debt Relief Industry > Business Models > Debt Settlement Attorney Referral Services Draw the Unwanted Attention of the Florida Bar

Debt Settlement Attorney Referral Services Draw the Unwanted Attention of the Florida Bar

The Florida Bar has launched a new investigation into for-profit lawyer referral services.

The committee studying this was informed that the Attorney General’s Economic Crimes Office is investigating several lawyer referral services, both those registered and not registered with the Bar.

Some of the services do “cold call” or direct solicitation, which is prohibited in Bar rules. According to information from the AG’s office, Board of Governors member Grier Wells, chair of the special committee said, “An attorney is usually connected to the agency and gives his/her name to the agency for use in ‘referring’ the consumer to the attorney. Once a consumer ‘retains’ the attorney, the attorney takes an up-front fee and bills on a monthly basis for supposed legal work. Whatever work is done in trying to eliminate the consumer’s debt is usually done by supposed paralegals. From what we have heard, little work is actually done by an attorney.”Source

Does that scenario sound familiar to anyone beside me?

The Florida Bar says the money that the consumer pays to the attorney is called a legal fee to circumvent the fee restrictions of [F.S.] sec. 501.1377 and secs. 817.802 and 817.803 that exempt attorneys in the practice of law.

Grier said, “Moreover, we are finding that a substantial portion of the legal fee (perhaps up to 80-90%) is remitted by the attorney to the referral agency in contravention of fee splitting ethics and the terms of sec. 877.02.”

Section 817.802 specifically refers to the section:

817.802 Unlawful fees and costs.

(1) It is unlawful for any person, while engaging in debt management services or credit counseling services, to charge or accept from a debtor residing in this state, directly or indirectly, a fee or contribution greater than $50 for the initial setup or initial consultation. Subsequently, the person may not charge or accept a fee or contribution from a debtor residing in this state greater than $120 per year for additional consultations or, alternatively, if debt management services as defined in s. 817.801(4)(b) are provided, the person may charge the greater of 7.5 percent of the amount paid monthly by the debtor to the person or $35 per month.

(2) This section does not prohibit any person, while engaging in debt management or credit counseling services, from imposing upon and receiving from a debtor a reasonable and separate charge or fee for insufficient funds transactions.

Section 817.803 is in reference to the perceived attorney exemption from this section:

817.803 Exceptions.

Nothing in this part applies to:
(1) Any debt management or credit counseling services provided in the practice of law in this state;

(2) Any person who engages in debt adjustment to adjust the indebtedness owed to such person; or

(3) The following entities or their subsidiaries:

(a) The Federal National Mortgage Association;

(b) The Federal Home Loan Mortgage Corporation;

(c) The Florida Housing Finance Corporation, a public corporation created in s. 420.504;

(d) A bank, bank holding company, trust company, savings and loan association, credit union, credit card bank, or savings bank that is regulated and supervised by the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of Financial Regulation of the Department of Financial Services, or any state banking regulator;

(e) A consumer reporting agency as defined in the Federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681y, as it existed on April 5, 2004; or

(f) Any subsidiary or affiliate of a bank holding company, its employees and its exclusive agents acting under written agreement.

Section 877.02 says:

877.02 Solicitation of legal services or retainers therefor; penalty.

(1) It shall be unlawful for any person or her or his agent, employee or any person acting on her or his behalf, to solicit or procure through solicitation either directly or indirectly legal business, or to solicit or procure through solicitation a retainer, written or oral, or any agreement authorizing an attorney to perform or render legal service, or to make it a business to solicit or procure such business, retainers or agreements; provided, however, that nothing herein shall prohibit or be applicable to banks, trust companies, lawyer reference services, legal aid associations, lay collection agencies, railroad companies, insurance companies and agencies, and real estate companies and agencies, in the conduct of their lawful businesses, and in connection therewith and incidental thereto forwarding legal matters to attorneys at law when such forwarding is authorized by the customers or clients of said businesses and is done pursuant to the canons of legal ethics as pronounced by the Supreme Court of Florida.

(2) It shall be unlawful for any person in the employ of or in any capacity attached to any hospital, sanitarium, police department, wrecker service or garage, prison or court, for a person authorized to furnish bail bonds, investigators, photographers, insurance or public adjusters, or for a general or other contractor as defined in s. 489.105 or other business providing sinkhole remediation services, to communicate directly or indirectly with any attorney or person acting on said attorney’s behalf for the purpose of aiding, assisting, or abetting such attorney in the solicitation of legal business or the procurement through solicitation of a retainer, written or oral, or any agreement authorizing the attorney to perform or render legal services.

(3) Any person violating any provision of this section shall be guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.

(4) This section shall be taken to be cumulative and shall not be construed to amend or repeal any other valid law, code, ordinance, rule, or penalty now in effect.

Reading 877.02 it seems darn near impossible in Florida for any agent, affiliate, company or marketer to accept funds for services to be performed by a lawyer. The part “It shall be unlawful for any person or her or his agent, employee or any person acting on her or his behalf, to solicit or procure through solicitation either directly or indirectly legal business, or to solicit or procure through solicitation a retainer, written or oral, or any agreement authorizing an attorney to perform or render legal service, or to make it a business to solicit or procure such business, retainers or agreements,” seems very clear and on face value appears to be directly applicable to attorney model debt settlement companies.

It seems the standard attorney model referral setup has drawn the attention of the Florida Bar. If you have information on this issue you’d like to share, contact [email protected]

Debt Settlement Attorney Referral Services Draw the Unwanted Attention of the Florida Bar
Get Out of Debt Guy – Twitter, G+, Facebook

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

Debt Settlement Attorney Referral Services Draw the Unwanted Attention of the Florida Bar by

Share This and Spread the Word

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.
  • Angelo
  • Angelo
  • Manny

    Fake testimonials from a brand new company? I wonder if their “lawyers” have seen these “results”?

    Center for Legal Justice is Bar Approved? Huh

  • Joe debt jr.

    you have to go through loops to find their address, there is none on their contact page.

  • Steve Rhode

    Here is an interesting coincidence. The address for the domain name
    CRHELP.com matches that of a company included in the bankruptcy filing of
    P&E Solutions as a creditor.

    *Automated Financial Transaction, Inc. 3010 W. Agua Fria Freeway, Suite
    103 Phoenix, AZ 85027-3944*

  • PikeyMug

    No no- Not at all- In fact I would count on it!

    Funny, I just spoke to a relatively useless person here- http://www.crhelp.com/

    sent me an email that claims they are a “not for profit legal referral service” selling “debt elimination”… with their so called lawyer network- that, according to her covers 25 states, she thinks, BUT they add attys as need be! Little new are you? I can speak to the owner tho, cause he knows more… Claimed it was “compliant”… I asked how? She didnt that either, it just IS.

    annnnnnnnnnnywayyyyyyyyyyyyyyyyyyyyyy…………………

  • Witness_Protection

    PikeyMug, just a loophole my man. Here’s a few red flags for you…would you find it strange to learn that all referrals go to the same “Law Group” (usually run by one or two attorneys) and then “assigned” to the local attorney in that clients state? And if you take a look at the “Law Groups” books will you be surprised to find the amount paid to the “legal referral service” will be in line with about 60-80% of the “Attorneys fees” collected? ….aka… affiliate fees…aka…fee splitting

  • PikeyMug

    877.02 does say “however, that nothing herein shall prohibit or be applicable to banks, trust companies, lawyer reference services, …”

    While they certainly market the programs, I guess i need to see the Bar definition of “cold call” or direct solicitation,….

  • PikeyMug

    877.02 does say “however, that nothing herein shall prohibit or be applicable to banks, trust companies, lawyer reference services, …”

    While they certainly market the programs, I guess i need to see the Bar definition of “cold call” or direct solicitation,….

    • Witness_Protection

      PikeyMug, just a loophole my man. Here’s a few red flags for you…would you find it strange to learn that all referrals go to the same “Law Group” (usually run by one or two attorneys) and then “assigned” to the local attorney in that clients state? And if you take a look at the “Law Groups” books will you be surprised to find the amount paid to the “legal referral service” will be in line with about 60-80% of the “Attorneys fees” collected? ….aka… affiliate fees…aka…fee splitting

      • PikeyMug

        No no- Not at all- In fact I would count on it!

        Funny, I just spoke to a relatively useless person here- http://www.crhelp.com/

        sent me an email that claims they are a “not for profit legal referral service” selling “debt elimination”… with their so called lawyer network- that, according to her covers 25 states, she thinks, BUT they add attys as need be! Little new are you? I can speak to the owner tho, cause he knows more… Claimed it was “compliant”… I asked how? She didnt that either, it just IS.

        annnnnnnnnnnywayyyyyyyyyyyyyyyyyyyyyy…………………

      • http://GetOutOfDebt.org Steve Rhode

        Here is an interesting coincidence. The address for the domain name
        CRHELP.com matches that of a company included in the bankruptcy filing of
        P&E Solutions as a creditor.

        *Automated Financial Transaction, Inc. 3010 W. Agua Fria Freeway, Suite
        103 Phoenix, AZ 85027-3944*

      • Joe debt jr.

        you have to go through loops to find their address, there is none on their contact page.

  • Bulb

    Funny thing, fee splitting with non attorneys in most states is just as much of a no-no and well covered just like the Florida Sections quoted in this piece.

    If you use this kind of model in debt settlement, proverbs like “May you live in interesting times” are more like a curse.

    An interesting curse.

  • Bulb

    Funny thing, fee splitting with non attorneys in most states is just as much of a no-no and well covered just like the Florida Sections quoted in this piece.

    If you use this kind of model in debt settlement, proverbs like “May you live in interesting times” are more like a curse.

    An interesting curse.

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.