Maryland Lawyer Richard Brennan Jailed for Debt Settlement Services

I was reading the MCRC Maryland Consumer Right Coalition “Debt Settlement in Maryland: Compounding problems, deepening debt” report. You can download your copy here.

In the document the story of attorney Richard Brennan who got heavily involved in debt settlement is told. It’s one of the few cases where I’ve seen an attorney go to jail as a result of their debt settlement business but apparently, they do.

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“Richard Brennan & the Brennan Law Firm may be the most infamous example of the problems with the debt settlement industry. Brennan is the only debt settlement firm to be prosecuted in Maryland to date. Brennan was found in violation of the Maryland Debt Management Services Act (MDMSA), which at the time restricted for-profit companies from providing debt management services. Brennan was providing services he was not legally able to provide. The Consumer Protection Division of the Attorney General’s office also charged that the firm misrepresented the experience of its staff and the amount consumers would save through debt settlement.

Finally, Brennan was found to have promised services that he did not render.

In October 2007, Maryland Attorney General Doug Gansler announced that his office’s Consumer Protection Division had reached a settlement with Richard Brennan, the Law Offices of Richard Brennan, LLC, and a related company called American Telecommunications Solutions LLC (collectively referred to as the Brennan Law Firm) in connection with their debt management and debt settlement services.

The suit charged that the Brennan Law Group failed to send consumers’ payments to their creditors. Approximately $240,000 from consumers was used to pay the firm’s own debts. The firm promised to return all payments to consumers that were not forwarded to creditors as well as pay costs and a civil penalty. Brennan also promised to stop selling debt settlement services unless he posted a $50,000 performance bond with the Consumer Protection Division of the Attorney General’s office.

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In January 2009, Brennan was disbarred from practicing law in the State of Maryland by the Court of Appeals. Despite agreeing to the settlement, Brennan never paid the penalties, costs and restitution, and continued to illegally sell debt settlement services to consumers. As a result, the Attorney General sued Brennan in the Circuit Court and in January 2009, the Court entered a judgment against him and his law firm and ordered him to cease selling debt settlement services to consumers and to pay restitution to the Division. After Brennan ignored that Order and continued to sell debt settlement services, the Division commenced its contempt action and Brennan was jailed for contempt of court on July 31, 2009.

The basic facts of Brennan’s case fail to convey the experiences of Maryland consumers who entrusted his firm, and others like it, to settle their debts and provide them with financial relief.”

Damon Day - Pro Debt Coach

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