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Lloyd Ward Group NAILED by Connecticut Over One Refund

If you look at the recent action taken by Connecticut you’d realize how important it is to make sure your debt relief company is fully compliant with every state. In fact I even give you a free tool to check that out.

Too bad Lloyd Ward Group, the Dallas based attorney model debt settlement firm, hadn’t used it. I’ve written about Lloyd Ward Group before, click here.

This event highlights the benefit of debt relief companies issuing full and prompt refunds for consumer that complain to the state. If this disgruntled consumer had received a full refund and a gracious note from the debt relief company, it probably would not have blown up into this mess.

On September 9, 2011 the Connecticut Department of Banking issued an Cease and Desist order and ordered a refund of fees and a civil penalty.

In May the State found that Lloyd Ward Group had entered into a debt relief contract and “[f]rom May 24 through September 22, 2010, the Connecticut resident remitted payments totaling $2,668.74 to Respondent for such debt negotiation services, in excess of amounts that debt negotiators may charge for services pursuant to the Schedule of Maximum Fees established by the Commissioner on or about October 1, 2009 (“Schedule of Maximum Fees”) and prior to Respondent fully performing the debt negotiation services.”

It turns out that Lloyd Ward Group was not licensed in the state and the fees charged busted the limits as defined below.

The Schedule of Maximum Fees established by the Commissioner provides, in pertinent part, that:

Initial Fee:
A debt negotiator of unsecured debt may charge the debtor a reasonable one-time initial or set-up fee in an amount not to exceed fifty dollars ($50).

Service Fees:
A debt negotiator of unsecured debt may charge a monthly service fee not to exceed eight dollars ($8) for each creditor that is listed in the debt negotiation service contract. The total service fee charged to a debtor may not exceed forty dollars ($40) per month.

Aggregate Fees:
A debt negotiator of unsecured debt may collect total aggregate fees including the initial fee and service fees, not to exceed ten percent (10%) of the amount by which the consumer’s debt is reduced as part of each settlement as agreed to in the debt negotiation service contract as each settlement is achieved. A debt negotiator may not charge more than ten percent (10%) of the amount by which the consumer’s debt is reduced on the basis that the consumer has entered into a debt negotiation contract for joint obligations of a consumer and a consumer’s spouse or other member of the consumer’s household. – Source

So much for the “free pass” of being an attorney, which Lloyd Ward is in Texas.

In the September 9, 2011 order the State of Connecticut said Lloyd Ward Group needed to repay the consumer the $2,668.74 in fees and pay a $500,000 fine. – Source

Now that’s a lot of money for ignoring a refund request and getting the basics wrong on compliance and registration.

Lloyd Ward Group NAILED by Connecticut Over One Refund
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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.
  • SRCT

    I have an update on this. I received notification in July of 2012 that Lloyd Ward could not operate in the St of Ct any longer and therefore my account was closed. Too bad for me that I already paid them 6 thousand dollars in fees. And come to find out they were operating in contract with me even when the cease and desist order for CT was issued and backdated. And when I called them and called them out on this they insisted on not refunding my fees because they provided me “service” for two years. What two years of taking my money and then by no fault of my own you are no longer able to serve CT residents … and you insist those fees are STILL VALID?! Take my money and run and I’m still sitting here with my open debt. I want my fees back and stat.
    I forwarded all the correspondance to attrney general of ct and ct dept of banking. Its not looking promising for Mr. Ward. I will get back my 6k in fees, even if I have to sue them personally. All this could have been avoided if they just refunded me now because of this I just lit another fire under their @$$es

  • Cupid

    I wonder if companies like this actually even made enough in a state like CT to cover the costs of this size of penalty?

    • Cupid

      Anyone have an opinion on how many companies operate incorrectly in CT?
      Dont they have fee caps that are pretty low? I heard thats why companies stay out of CT, but do they really stay out?

  • Nick Denton

    Is it mandatory for a debt settlement law firm (For Profit) to get license to do debt settlement business in the state of TX?

  • Guest

    Now lets see how good their debt negotiation skills are with their own debt of 500k.  Maybe they can settle that debt at 250k?

    • http://GetOutOfDebt.org Steve Rhode

      How ironic.

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