WV Schoolteacher Who Was a Victim of Morgan Drexen Debt Settlement Scam Receives National Attention
CHARLESTON – As part of their ongoing “Debt Deception” investigative series, the Center for Public Integrity is telling the story of Mary Linville of Lincoln County, a victim of a debt settlement scam perpetrated by Morgan Drexen, a Nevada company based in greater Los Angeles. Attorney General Darrell McGraw sued the company in May in response to complaints filed by the retired schoolteacher and other West Virginia consumers who paid exorbitant up-front fees for debt settlement, did not receive the promised services, and in several cases were forced to declare bankruptcy.
Published under the headline “Borrower Nightmares: Small town teacher seeks help for big debt, ends up in bankruptcy” on the Center’s iwatchnews.org website, Mrs. Linville’s tale is part of a series to mark the July 21 launch of the new federal Consumer Financial Protection Bureau.
The article notes how Mrs. Linville, a resident of Alkol, WV, was scammed out of thousands of dollars that she paid to Morgan Drexen. The company promised to cut her $72,000 debt in half and pay off her creditors. Instead, Morgan Drexen took approximately $7,000 from her checking account for itself while providing no relief from the creditors. Linville was not aware that there was a problem until she was served with a summons for her credit card debt by a friend of her son, a county sheriff’s deputy. She was forced to file for bankruptcy a few months later. The article can be found here.
On May 19, Attorney General McGraw filed suit in the Circuit Court of Kanawha County to ban Morgan Drexen from doing business in West Virginia. McGraw’s suit maintained that Morgan Drexen attempts to avoid state debt collection laws and charge higher fees than allowed by linking its operations to licensed lawyers, who supposedly attempt to get creditors to accept less than what is owed on outstanding debts. McGraw contends that these “enrollment lawyers” do no substantive work and are merely renting out their licenses to Morgan Drexen. A hearing to enjoin Morgan Drexen from engaging in its debt settlement activities is scheduled for July 29 in Circuit Court.
“I must again caution consumers, especially those who, like Mrs. Linville, are already facing dire financial circumstances, that paying excessive fees for supposed debt relief services may in fact leave them in worse financial shape,” Attorney General McGraw said.
More than 500,000 Americans with about $15 billion of debt are currently enrolled in debt settlement programs. – Source