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Whitman v. Legal Helpers Debt Resolution, Global Client Solutions, Macey Bankruptcy Law

On January 13, 2012 Jeanne Whitman filed suit against Legal Helpers Debt Resolution, Global Client Solutions, Macey Bankruptcy Law in South Carolina.

The suit allegers the Defendants violated the South Carolina Consumer Protection Code, the South Carolina Unfair Trade Practices Act, acted fraudulently by representing it would provide legal services, made false and negligent misrepresentations, and the defendants conspired.

This case was filed by:

Penny Hays Cauley
HAYS CAULEY, P.C.
549 West Evans Street, Suite E
Florence, SC 29501
(843) 665-1717
(843) 665-1718 Facsimile
[email protected]

The suit makes the following claims and allegations:

On or about April 1, 2010, the Plaintiff, along with her husband, who is now deceased, received an unsolicited letter in the mail from Defendants LHDR and Macey, Aleman, Hyslip & Searns, now known as Defendant Macey Bankruptcy Law, P.C. (Hereinafter “MBL”). Defendants LHDR and MBL had, through unknown means, ascertained the fact that the Plaintiff had over $50,000 in total credit card debt and offered to help the Plaintiff settle her debt, proposing a monthly payment of $694.00. At this point in time, neither the Plaintiff nor her husband were behind on any of their accounts and each account was in good standing.

The Plaintiff and her husband entered into a contract with the Defendant LHDR. Included in the documentation signed by the Plaintiff was a “Power of Attorney”. The header on the “Power of Attorney” read “Legal Helpers Debt Resolutions, LLC – The National Law Firm of Macey, Aleman, Hyslip & Searns”. Along the right margin, the “Power of Attorney” listed the names of LHDR’s “partners” in each state.

On or about April 1, 2010, the Plaintiff signed an “Attorney Retainer Agreement” (hereinafter referred to as “the Agreement”) sent to her by the Defendant LHDR and MBL Signing for the Defendants was Jeffrey Hyslip, Managing Attorney. In the Agreement, Defendant LHDR and MBL stated that the agreement was for legal services. Defendants LHDR and MBL also stated that LHDR agreed to employ its best efforts at obtaining a satisfactory result for the Plaintiff by providing basic legal services.

Attached to the Agreement was “Addendum A”, which indicated the services offered by LHDR. These services were “credit counseling”, “bankruptcy”, and “debt negotiation”. Page 5 of the Agreement states that “Consumer Credit Counseling may impact less on the Client’s credit rating and reduce interest rates on current debt, but generally will require payment of the majority of the Client’s existing debt”.

The Plaintiff received a document from LHDR entitled “OUR PLEDGE TO OUR CLIENTS” (hereinafter referred to as “the Pledge”). The Pledge stated that LHDR was “committed to providing the highest level of legal services”, that LHDR “will contact your unsecured creditors to advise them that they should only communicate with our firm as your attorneys”, and that “in the event that any creditor, or collection agency, violates Federal or state law in regards to their debt collection practices, we are prepared to fully represent you to protect your rights under the law.”

The Plaintiff received a document from LHDR entitled “IMPORTANT INFORMATION REGARDING YOUR PROGRAM”. Said document stated that “LHDR has now initiated the procedures necessary to notify your creditors that you are now being represented by an attorney.”.

The Plaintiff received a document from LHDR entitled “FREQUENTLY ASKED QUESTIONS” (hereinafter referred to “FAQ”). In the FAQ, LHDR states that it will send letters to creditors notifying creditors that LHDR is now representing the Plaintiff, that the Plaintiff no longer needs to make payments on her accounts, that this plan will have a negative affect on the Plaintiff’s credit, but that once the accounts are settled the creditors will have to report that updated information, and that LHDR has “extensive knowledge of both state and Federal laws such as FDCPA to assist protecting [the Plaintiff’s] rights under these laws.”

On or about March 29, 2010, the Plaintiff signed a “Special Purpose Account Application”. Said document allowed Global Client Solutions, LLC to accumulate funds from the Plaintiff in order to repay debts in connection with a debt settlement program.

None of the documents provided to the Plaintiff explained that LHDR would be holding payments for six months until the accounts were past due and charged-off.

No one at LHDR told the Plaintiff that by signing the agreement for representation, the Plaintiff’s credit was actually going to get worse.

In May, 2010, the Plaintiff received an “Account Activity Statement” from Global Client Solutions, LLC. This statement showed that the Plaintiff had made an initial payment of $888.20. The statement further shows that a $5.00 setup fee was taken from the Plaintiff, that a $49.95 fee had been taken from the Plaintiff which was being styled as a “maintenance cost,” that a $125.00 retainer had been taken from the Plaintiff, and that a $699.50 initial service cost was being charged to the Plaintiff. None of the funds paid by the Plaintiff went towards settling any of her credit card debts.

On or about June 16, 2010, the Plaintiff received an “Account Activity Statement” from Global Client Solutions, LLC. This statement showed that the Plaintiff had made an $883.20 deposit. The statement further showed that the Defendants had taken $49.95 from the Plaintiff as a “maintenance Cost.” The Plaintiff was also charged a $125.00 retainer and a $699.50 initial service cost. Again, none of the funds paid by the Plaintiff went towards settling any of the Plaintiff’s credit card debts.

On or about July 16, 2010, Global Client Solutions, LLC sent the Plaintiff an “Account Activity Statement”. The statement showed an $883.20 deposit made by the Plaintiff. The statement further showed that the Defendants had taken a $49.95 maintenance fee from the Plaintiff, that the Defendants had taken a $125.00 retainer from the Plaintiff, and that the Defendants had taken a $699.50 initial service cost from the Plaintiff. None of the funds paid by the Plaintiff went towards settling any of the Plaintiff’s credit card debts.

On or about July 19, 2010, the Plaintiff, who had been completely current on her credit cards prior to becoming involved with the Defendants, was sued by CitiBank to collect on a balance that, at the time of suit, had ballooned to $29,446.89.

Immediately after receiving the lawsuit, the Plaintiff called Vanity Hernandez, client care team trainer/settlement coach with LHDR, to let her know that she had been sued. The Plaintiff was extremely upset that she had been sued and asked if LHDR was going to file a response on her behalf. Hernandez told her that she could do the same thing LHDR could and that no one from LHDR nor the South Carolina attorney listed as a partner at LHDR would be representing her in the lawsuit. Hernandez did provide the Plaintiff with some things she should say in court as a defense but the Plantiff did not understand them at all. Upon information and belief, Hernandez is not a practicing attorney.

On or about July 21, 2010, the Plaintiff received a letter from Discover Card which indicated that she was currently past due and that she owed $1,223.00.

On or about July 25, 2010, the Plaintiff’s husband received a letter from GE Money Bank indicating that he was late in making payments and that he currently owed $70.00.

On or about August 2, 2010, the Plaintiff’s husband received a letter from Northland Group regarding a CitiBank debt. The letter stated that a current balance of $1,388.46 was due and provided two settlement options: four payments of $173.56 or two payments of $312.42.

On or about August 12, 2010, the Plaintiff received a letter from Zwicker and Associates. The letter indicated that the firm had been retained by DFS Services, LLC to collect $16,107.37.

On or about August 17, 2010, Global Client Solutions, LLC sent the Plaintiff an “Account Activity Statement”. The statement indicated that the Plaintiff had made a deposit of $883.20. The statement further indicated that the Defendants had charged the Plaintiff a $8.75 maintenance fee, a $125.00 retainer, and a $699.50 initial service cost. For the fourth time, none of the funds provided by the Plaintiff went towards settling any of the Plaintiff’s credit card debts.

On or about August 17, 2010, the Plaintiff filed a pro se Answer to the lawsuit filed by CitiBank. At no point did the Defendants ever provide any legal representation to the Plaintiff on this matter other than advice given to the Plaintiff by non-lawyer Vanity Hernandez. Additionally, the Defendants made no effort to settle this debt or work out some type of payment arrangement on the Plaintiff’s behalf.

On or about August 31, 2010, the Plaintiff received discovery requests from CitiBank. The Plaintiff again contacted LHDR regarding the discovery but the Defendants never provided any legal representation to the Plaintiff in regards to answering discovery.

On or about September 1, 2010, the Plaintiff’s husband received a letter from Northland Group regarding his CitiBank account. The letter stated that Northland is willing to settle the matter for $624.84.

On or about September 15, 2010, Global Client Solutions, LLC sent the Plaintiff an “Account Activity Statement”. The statement indicated that the Plaintiff deposited $883.20. The statement further indicated a maintenance fee of $8.75 and a remaining service cost of $374.97. Per the payment schedule attached to the Agreement, this was the first time that any money paid by the Plaintiff went to any entity other than the Defendants.

On or about September 17, 2010, the Plaintiff received a second letter from Zwicker and Associates regarding her debt with DFS, LLC.

On or about September 22, 2010, World Omni Financial Corp sued the Plaintiff’s husband. Once again, the Plaintiff notified LHDR of the pending law suit. At no point did the Defendants provide any legal representation as it relates to the lawsuit filed by World Omni Financial Corp in spite of the Plaintiff signing a retainer agreement with LHDR for representation.

On or about October 28, 2010, the Plaintiff received a Motion for Summary Judgment from CitiBank. Again, the Plaintiff notified LHDR, but LHDR did nothing even though the Plaintiff had a signed retainer agreement with LHDR and LHDR represented it had an attorney in South Carolina. At no point did the Defendants provide any legal representation as it relates to CitiBank’s Motion for Summary Judgment.

On or about December 1, 2010, CitiBank sued the Plaintiff on a separate account. The Plaintiff notified the Defendants of this lawsuit as well but again the Defendants did nothing and failed to provide any legal representation as it relates to the lawsuit filed by CitiBank.

On or about December 16, 2010, Global Client Solutions, LLC sent the Plaintiff an “Account Activity Statement”. The statement indicated a payment of $883.20 made by the Plaintiff to the Defendants. The statement further indicated a maintenance fee of $8.75, a maintenance cost of $49.95, and a service cost of $374.97. The statement also showed that the Defendants had finally begun to disburse funds to the Plaintiff’s creditors, paying Northland Group $555.38 and Nationwide Credit Inc. $800.00.

On or about December 30, 2010, World Omni Financial Corp. received a judgment against the Plaintiff’s husband for $12,756.75. At no point did the Defendants provide any legal representation to the Plaintiff’s husband relating to his matter with World Omni Financial Corp even though the Plaintiff’s husband had also signed the retainer agreement with LHDR.

On or about January 7, 2011, a judgment was entered against the Plaintiff relating to the CitiBank cased filed the previous July. At no point did the Defendants provide any legal representation to the Plaintiff as it relates to this CitiBank matter. As a result, the Plaintiff now has a judgment against her for $29,666.89. When the Plaintiff received notice of the judgment, she again called LHDR. This time, Vanity Hernandez told the Plaintiff to not worry about the judgment because if she waited long enough, CitiBank would eventually be willing to settle for less than the judgment.

On or about January 18, 2011, Global Client Solutions, LLC sent the Plaintiff an “Account Activity Statement”. The statement indicated a deposit of $883.20 had been made to the Defendants. The statement also indicated that the Plaintiff had been charged an $8.75 account maintenance fee, a $49.95 maintenance cost, and a $374.97 service cost.

On or about January 26, 2011, World Omni Financial placed a lien against the Plaintiff’s property due to the judgment received on December 30, 2010.

On or about February 17, 2011, Global Client Solutions, LLC sent the Plaintiff an “Account Activity Statement”. The statement indicated a deposit made to the Defendants of $883.20. The statement further indicated that the Plaintiff had been charged a maintenance fee of $8.75, a maintenance cost of $49.95, and a service cost of $374.97.

On or about March 11, 2011, CitiBank received a second judgment against the Plaintiff in the amount of $5,726.28. At no point did the Defendants provide any legal representation whatsoever related to this CitiBank matter. The Plaintiff notified LHDR of each judgment but LHDR failed to take any action.

On or about March 19, 2011, Global Client Solutions, LLC sent the Plaintiff an “Account Activity Statement”. The statement indicated a deposit made to the Defendants of $883.20. The statement further indicated that the Plaintiff had been charged a maintenance fee of $8.75, a maintenance cost of $49.95, and a service cost of $374.97.

On or about April 15, 2011, Global Client Solutions, LLC sent the Plaintiff an “Account Activity Statement”. The statement indicated a deposit made to the Defendants of $883.20. The statement further indicated that the Plaintiff had been charged a maintenance fee of $8.75, a maintenance cost of $49.95, and a service cost of $374.97.

The Plaintiff’s husband passed away in September of 2011. After his passing, the Plaintiff clearly told the Defendants that she was going to stop payments because she could no longer afford $883.20 per month now that her husband had died. LHDR employee Vanity Hernandez, upon hearing this from the Plaintiff, told the Plaintiff not to stop making her payments because she would be kicked out of the program.

Shortly after the Plaintiff notified LHDR that she could no longer afford the payments, the Plaintiff received an unsolicited telephone call from John Cantrell, Jr. Cantrell was listed as a partner with LHDR and told the Plaintiff he was an attorney with LHDR. Mr. Cantrell recommended that the Plaintiff simply file bankruptcy and offered his services.

According to the payment schedule attached to the Agreement, upon completion of the plan, the Plaintiff would have made payments totaling $41,973.45. Of that sum, $28,418.80 would have been actually distributed to the Plaintiff’s creditors. The remaining $13,554.65 would be kept by LHDR.

At the time the Plaintiff stopped making payments, LHDR had collected $8,497.06 in service fees, $899.10 in maintenance costs, and $500.00 in retainer fees.

At no point did LHDR provide the Plaintiff with a credit education program designed to improve the financial literacy of the Plaintiff.

At no point did LHDR deliver a thorough, written budget analysis to the Plaintiff which indicated that the LHDR’s services were suitable to the Plaintiff and that the Plaintiff could reasonably expect to meet the requirements of said budget analysis.

The Agreement between the Plaintiff and the LHDR failed to indicate, in bold face type, that the Plaintiff may terminate the agreement for any reason at any time by giving ten days written notice and that, upon termination, all unexpended funds would be returned to the Plaintiff.

The Agreement failed to disclose that LHDR may receive compensation from the Plaintiff’s creditors for providing credit counseling services to the Plaintiff.

The Agreement failed to disclose that LHDR may not require the Plaintiff purchase any other product or service, or solicit to offer to sell any other product or service to the Plaintiff during the term of the Debt Management Plan.

The Agreement failed to disclose that LHDR may not require a voluntary contribution from the Plaintiff for a service provided by the LHDR to the Plaintiff.

The Agreement failed to disclose that the Plaintiff may contact the South Carolina Department of Consumer Affairs if she had complaints regarding the services provided by LHDR. The Agreement failed to provide the current phone number of the Department of Consumer Affairs.

Whitman v. Legal Helpers Debt Resolution, Global Client Solutions, Macey Bankruptcy Law
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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.
  • MT

    Who are you soposed to believe anymore! SMH…

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