Recently I published Reader Raises Concerns About Peak Legal Advocates and Veritas Legal Plan Gets Tossed Under Bus. Between the post and the comments a concern was raised about the Peak Legal Advocates program. And a back and forth commenced between Rob Katz of Peak and Angelo Anzalone of Veritas Legal Plan.
I do have to applaud Mr. Katz for responding to my emails to him, clarifying that the client agreement I have is the current client agreement, and engaging in a conversation. Mr. Anzalone should also be applauded for providing his point of view and facts. At the end of the day I’m not the arbitrator of truth and have to leave that up to the reader to discern from the information acquired and presented.
To that end I am publishing the Peak Legal Advocates client agreement that has been confirmed to be authentic. I am not a lawyer and what follows is my interpretation of the language within the four corners of the contract.
I’d love to hear what you have to say after looking at the agreement and reading the comments over here. Post your observations in the comments below.
And please note, I am not removing the Alex Turner name from the client agreement because Alex is an employee for Peak and this is not disclosing confidential client information.
Peak Legal Advocates Client Agreement Review
The agreement for services is “to represent me in connection with prosecuting unfair debt collection practice claims, including potentially filing suit on my claims for violation of the Federal and/or State Fair Debt Collection Practices Acts, or other consumer protection laws.”
Interestingly the agreement does not state who the party is other than the client. It does not say it is between the client and Peak Legal Advocates. The agreement says ATTORNEY but not what specific attorney.
It is always important for any consumer to read the client they are being asked to sign to understand the services they are agreeing to buy. In this case the “scope of services” says the consumer is getting an attorney “to provide defense against unfair debt collection practices by CLIENT’S creditors.”
The attorney will do this by issuing “Demand for Debt Validation letters and/or Collection Practice Violation Letters in an effort to prevent CLIENT’S creditors from unduly or improperly harassing CLIENT. In addition, in the event that CLIENT receives a lawsuit in connection with any of CLIENT’S specified debt accounts listed in Exhibit A, then ATTORNEY shall provide CLIENT with a Pro Se Answer (written in client’s own name) responding to the lawsuit for CLIENT to file with the Court.”
Hopefully consumers will understand the part above. The agreement clearly says the consumer/client will NOT be represented by the ATTORNEY if they are sued, unless they pay additional money.
“CLIENT understands that ATTORNEY shall not be the attorney-of-record on the Answer, nor shall ATTORNEY directly represent CLIENT in such lawsuit without an additional retainer agreement defining that additional scope of services. The Court filing fee and any addition litigation services beyond the preparation of the Pro Se Answer are not subject to, nor included in this retainer agreement.”
This agreement says the client is not getting “any debt relief, debt settlement, or debt negotiation services.”
The client receives access to legalclub.com for additional services and educational benefits. I talk about this latter.
If the attorney, whoever that is, decides the client has a good case against a creditor, they may decide to move forward to file a lawsuit against the creditor. But that does not come without costs to the client.
“If CLIENT and ATTORNEY agree to litigate a claim against a creditor and CLIENT receives a favorable judgment or settlement, then CLIENT agrees to pay ATTORNEY certain “Contingent Fees” described as: 50% of any recovery obtained by way of settlement of the claim plus attorney’s fees incurred prior to the filing of any legal action. CLIENT agrees to settle any lawsuit or claim against a creditor for a minimum of $500.00 payable to CLIENT after the deduction of all attorney’s fees. ATTORNEY will be paid first attorney’s fees at the normal hourly rate before CLIENT receives any remaining settlement funds. If the CLIENT obtains a favorable judgment or settlement against the creditor, CLIENT agrees to pay ATTORNEY any and all attorney’s fees awarded on the judgment (plus reimbursement of any court costs and expenses incurred) and CLIENT will receive any damages awarded, including any statutory punitive damages award up to $1,000.00 under federal law and $1,000.00 under state law. In the event of litigation, regardless when the case is resolved, ATTORNEY shall be entitled to be paid his attorneys’ fees for the time incurred at the rate of $275.00 an hour (“Normal Rate”).”
It might just be me but it seems a client could be defended in a suit and wind up still owing money since the pre-filing hours will be charged at $275. I realize the agreement says, “CLIENT agrees to settle any lawsuit or claim against a creditor for a minimum of $500.00 payable to CLIENT after the deduction of all attorney’s fees.” But what about the court fees and expenses? The agreement does state, “If CLIENT does not terminate this agreement but no recovery is obtained from the creditor, then CLIENT shall not be required to pay the contingent fees described above.” So nothing would be owed by a client when the attorney, still don’t know who that is, does not win.
It appears there are fees that the client will have to be responsible for no matter what.
“NOTWITHSTANDING THE FOREGOING, ATTORNEY SHALL BE ENTITLED TO RECEIVE CERTAIN NON-CONTINGENT FEES REGARDLESS OF WHETHER A JUDGMENT IS OBTAINED AGAINST THE CREDITOR. THESE NON-CONTINGENT FEES ARE DESCRIBED BELOW:”
These fees include:
- Some potential monthly fee for an undetermined number of months. It seems to read as if a monthly amount would be inserted here. Otherwise, why is it here? So without some understanding of what this fee is and how it might be calculated then we have no idea how much the services for Peak Legal Advocates may be.
- A monthly flat fee of $59 per month.
- It is not clear which of the two fees identified are the “service fee” described that may be shared for referral services.
The missing fee information seems very important. Angelo said over in this comment that Peak Legal Advocates was promoting affiliate income based on income as a percentage of debt enrolled in the plan. “12% (Maximum) of total debt load + $49.00 monthly administrative fee.” The purported marketing email said the affiliate would be paid “40% of the 12% (or total fee charged).”
There is then an example provided:
“AFFILIATE COMPENSATION: 40% of the 12% (or total fee charged)
Example: 30k debt load
12% fee = $3600
Affiliate Compensation: $1440 (paid out over 12 months)”
It appears the consumer is paying 12% of the debt they include in this plan for no legal representation by Peak Legal Advocates. The client however will receive answers to lawsuit by creditors when they get sued. These will have to be filed by the client under their own name and at their own expense. Additionally, if a case is found that some, yet unknown attorney, wants to take on then additional fees may be experienced.
Then we get into the no guarantees are made and any disputes will be settled by arbitration.
Then we basically have a full page of continued arbitration language which generally protects the party who the consumer is contracting with.
Just a signature page and list of creditors.
This is the listing of LegalClub.com benefits the client is supposed to have access to as part of this agreement.
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