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EFA Processing, New Leaf Debt, Neil Ruther and Consumer Law Associates Sued in Kansas

Thanks to great readers and tipster (send in your tips here)s I just found out about Hays v. Consumer Law Associates, Neil Ruther, New Leaf Debt and EFA Processing.

The suit goes after the defendants for violations of the Kansas Credit Services Organization Act, Kansas Consumer Protection Act, and conspiracy.

The suit alleges the following facts.

On September 23, 2009, while in Sumner County, Kansas, Mrs. Hays was researching debt consolidation and management, reviewing several web sites including that of www.newleafdebt.com, which is operated by New Leaf Debt, LLC, and Mrs. Hays sent a message via the website. Shortly thereafter, also in September 2009, Mrs. Hays visited via e-mail about her debt and debt management with Amina Artis Cook, who contacted Mrs. Hays as the result of Mrs. Hays’s inquiry to the website.

Ms. Cook referred Mrs. Hays to a Ray Evans at Consumer Law Associates, LLC.

Mr. Evans called Mrs. Hays on October 29, 2009, regarding her debt and debt management and emailed a “Client Retainer Package” to Mrs. Hays at her email address in Kansas the same day. The return email address was from Ray Evans at EFA Processing. The address for Consumer Law Associates in the agreement was at EFA Processing’s address in Frisco, Texas. Mr. & Mrs. Hays completed and sent the Client Retainer Package back electronically on October 29, 2009. A correct copy of the Client Retainer Package, redacted to remove the Hayses’ bank account information, is attached as Plaintiff’s Exhibit 2.

The Client Retainer Package includes the following provisions:

a. “CLA would like to congratulate you on your decision to take control of your financial future and for allowing us to provide you with one of the most effective solutions to solving your debt elimination needs. . . . As I have discussed with you, the following documents are necessary to begin the debt settlement process.” Plaintiff’s Exhibit 2, p.3.

b. “Client is requesting CLA to assist client in the resolution of outstanding debts (‘Enrolled Debts’) with the following creditors by way of negotiation of payment plan or lump sum settlement.” Plaintiff’s Exhibit 2, p. 6, ¶ 2.

c. “‘We’ or ‘Us’ means Consumer Law Associates, LLC and its administrative staff at EFA Processing.”

d. “In the event you are sued, for a small additional fee, we will assist you in preparing an answer to such suit and will negotiate with the creditor’s attorney on your behalf. We will not go to court with you or file an appearance on your behalf, as the cost of doing so would be prohibitive. We will advise you on what the creditor can do, if anything, with a judgment and will work with you to revise your debt reduction plan if it’s necessary to serve your interests.” Plaintiff’s Exhibit 2, p. 6, ¶ 4 (emphasis original).

Mr. and Mrs. Hays received an e-mail from Consumer Law Associates on November 3, 2009, confirming their engagement of Consumer Law Associates. They made their last payment on January 19, 2011. Therefore, Mr. and Mrs. Hays’ relationship with the defendants lasted no less than the 442 days that elapsed between those two dates.

Defendant Neil J. Ruther is an attorney licensed in Maryland, and is a member of defendant Consumer Law Associates, owning 99.75% of that company. All of the actions taken by defendant Consumer Law Associates in connection with the plaintiffs herein are part of the intentional business of defendant Consumer Law Associates, and occurred with the approval defendant Ruther.

No defendant is registered as a Credit Services Organization with the Office of the State Banking Commissioner.

All of Mr. and Mrs. Hays’ communications with any defendant or the agent of any defendant occurred while the plaintiffs were physically located in Sumner County, Kansas. During the pendency of their involvement with the defendants, the Hayses sent and received no fewer than 91 e-mails, 17 phone calls, and 31 faxes to and from the defendants. – Source

The attorney that filed the suit is:

Martin J. Peck, #16273
Security State Bank Building
107 E. Harvey,
Second Floor
P.O. Box 421
Wellington, KS 67152
(620) 326-5997
Fax (620) 326-6887
[email protected]

EFA Processing, New Leaf Debt, Neil Ruther and Consumer Law Associates Sued in Kansas
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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.
  • Scott Johnson

    Quick Overview of KS
     
    Chapter 50: Unfair Trade And Consumer ProtectionArticle 11: Credit Services Organizations50-1117: Same; definitions. Definitions as used in this act: (a) “Commissioner” means the state bank commissioner. (b) “Consumer” means an individual who is a resident of this state. (c) “Credit services organization” means a person who engages in, or holds out to the public as willing to engage in, the business of debt management services for a fee, compensation or gain, or in the expectation of a fee, compensation or gain. (d) “Debt management service” means: (1) Receiving or offering to receive funds from a consumer for the purpose of distributing the funds among such consumer’s creditors in full or partial payment of such consumer’s debts; (2) improving or offering to improve a consumer’s credit record, history or rating; or (3) negotiating or offering to negotiate to defer or reduce a consumer’s obligations with respect to credit extended by others. (e) “Insolvent” means a person whose debts exceed their assets. (f) “Person” means any individual, corporation, partnership, association, unincorporated organization or other form of entity, however organized, including a nonprofit entity
     
    https://usdr.us/company_crm/

  • Scott Johnson

    Quick Overview of KS
     
    Chapter 50: Unfair Trade And Consumer ProtectionArticle 11: Credit Services Organizations50-1117: Same; definitions. Definitions as used in this act: (a) “Commissioner” means the state bank commissioner. (b) “Consumer” means an individual who is a resident of this state. (c) “Credit services organization” means a person who engages in, or holds out to the public as willing to engage in, the business of debt management services for a fee, compensation or gain, or in the expectation of a fee, compensation or gain. (d) “Debt management service” means: (1) Receiving or offering to receive funds from a consumer for the purpose of distributing the funds among such consumer’s creditors in full or partial payment of such consumer’s debts; (2) improving or offering to improve a consumer’s credit record, history or rating; or (3) negotiating or offering to negotiate to defer or reduce a consumer’s obligations with respect to credit extended by others. (e) “Insolvent” means a person whose debts exceed their assets. (f) “Person” means any individual, corporation, partnership, association, unincorporated organization or other form of entity, however organized, including a nonprofit entity
     
    https://usdr.us/company_crm/

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