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.
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:
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).
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.
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 by Steve Rhode
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