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Morgan Drexen Not Telling The Whole Story on Fees? The Most Bizarre PR Encounter I’ve Ever Had.

What began as a simple story about a Morgan Drexen press release last week has turned into so much more.

Last Friday I wrote “Is Debt Settlement Company Morgan Drexen a Flip-Flopper?” where I talked about their seemingly sudden switch from opposing the Federal Trade Commission effort to roll out new rules that regulate debt settlement companies, to applauding them.

The release had been sent to me by a tipster (send in your tips here) with the statement, “Seems odd to me that the title of their PR would be Morgan Drexen Says Let’s Be Upfront About The Fees when they never disclose in the release what Morgan Drexen’s fees are, how they’re calculated or collected, or if the company is even going to be changing their business model to comply with the FTC ruling?”

The tipster (send in your tips here) had raised an excellent point and as I said in my article, “I’ve emailed Morgan Drexen to ask, let’s see if they respond.”

I emailed their media department, the very employees or representatives that are supposed to work with the press.

During my professional career at the nonprofit I founded, Myvesta, I had a strong media department. I’m proud that say that Nancy who ran our media department went on from Myvesta to be named the FTC’s Public Affairs Director. – Source, Source

Nancy taught me a lot about working with the media. And one of the lessons I learned by working with her was to be helpful to all media because the media helps to tell your story.

And now I find myself on the other side of the media rope. Instead of being the person interviewed constantly I’m now the one writing and trying to get information in order to help clarify and report.

It’s hard. Many of the companies I write about simply don’t respond to requests for information or clarification. Rather than discuss, they hide or avoid. Not a smart strategy for them if they want to develop a reputation of honesty and trustworthiness.

But my saga with Morgan Drexen over trying to get a simple answer to the tipster (send in your tips here)s question turned into what I would classify as the most bizarre media encounter I’ve ever had and ended with perceived threats and an attack against me.

As I said in that Friday post, I asked Morgan Drexen for clarification about what they meant when they said, “Unscrupulous Debt Settlement Companies can no Longer Charge an Upfront Fee for Their Services. Morgan Drexen Welcomes Any Protection for the Consumer.”

The initial response from the Morgan Drexen media contact was that she did not understand my question of, “Does your press release state that Morgan Drexen and the attorneys they support will only charge consumers when debts are settled?”

She said she was confused and that my question was a statemenrt. The quoted response from her was, “Morgan Drexen and the network of attorneys they provide automated software service too have always been, and will continue to work within the law.”

Now you may be scratching your head and saying to yourself, the Morgan Drexen response does not answer the question and you’d be right.

So I tried again and this time I wanted to make sure that my question could not be misconstrued as a statement so here is what I asked:

My question still stands, under the FTC TSR there are two methods of charging fees and your release is not clear on this matter. You could either conform to the TSR and not collect a fee until the debt is settled or you could claim you are exempt under the TSR as attorneys and collect a fee beginning after the consumer enrolls in the debt settlement program. Your statement that you will work within the law is vague given the availability of the possible attorney exemption.

Let’s see if I can ask this one more time.

Can you help me to clearly understand what the Morgan Drexen approach is under the FTC TSR and how you plan to “work within the law” by either claiming an attorney exemption to fees and collecting them before settlement or collect fees as specified under the TSR only on settlement?

By this point the Morgan Drexen media department had asked me what my press credentials were and in my email response which included the above I said, “I write for getoutofdebt.org and my audience is filled with many regulators and states that monitor the debt relief industry through my work.”

So the response from Morgan Drexen was what appeared to be an automated statement:

Hello

Thank you for contacting us regarding a recent press release you have read. Despite the fact that we receive many emails this inbox is not monitored daily.

If you are a reporter on a deadline please call the designated media line number you were given as an approved contributor for the financial industry.

Sadly we can’t respond to ‘ Bloggers ‘ or any individual associated with financial companies currently under investigation in California. In addition, companies claiming to provide work for nationwide regulators, unless the regulatory organizations can be named and contacts confirmed.

The Media Team

Huh? Was I the one the automated response called a ‘blogger’ and was I the person they were stating was associated with some company currently under investigation in California and working for regulators? And if they were insinuating that stuff why would it come in what clearly appears to be an auto-responder email to all inquiries to the Morgan Drexen media department? It just made no sense.

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Keep in mind, they still have not answered what I thought was a simple clarification question.

I responded again.

Finally I get a response from “the Media Team” with a quote for the story and statement that says:

“Morgan Drexen, Inc. and the network of attorneys they provide automated software service too have always been, and will continue to work within the law. They welcome any regulation to protect consumers from companies such as Myvesta and Debt Counselors of America who claim to be non-profit, and therefore under investigation in California. Companies you and your wife were involved with Mr. Rhodes, that is why we distance ourselves from any association with you and your blog.”

I am sure you can edit the bits that don’t fulfill your self promotion sir.

So seriously, when is the job of any company that wants to establish a reputation as a leader in any industry to attack the media or any public outlet of infromation? How ridiculous is that?

So what began as a one sentence clarification question resulted in no answer from Morgan Drexen and a personal attack against me with clearly incorrect information.

From my subsequent response to Morgan Drexen.

This is the strangest media interaction I’ve ever had with any company. My tone and contacts with you have been both professional and personal. Not snippy and snide. Your tone and actions have been a seeming attempt to create a poor taste.

First, allow me to clear up your incorrect information. I’ve talked openly about the California issue for years and I even talk about it on my site. See https://getoutofdebt.org//16877

As you will see the disagreement with California was resolved eight years ago. Myvesta had one issue in its lifetime, as the result of a lack of response from California and we had over 20,000 clients. Shall I start counting all the lawsuits and actions against MD?

Myvesta was Debt Counselors of America, same group and despite your insinuation, a fully vetted and approved IRS 501(c)3 nonprofit with permanent status. The company closed in 2006.

I’m at a loss why you won’t answer my simple question. It would seem to me that your job, as a media professional is to assist outlets that want to write factually and accurately about MD. The only thing you have accomplished is to make a bigger story out of a little one.

What began as a simple clarification into what your press release said, has become one of an unfounded attack on me and your inability to answer just one simple question.

So, let’s try this one more time and if you elect not to answer the question I’ll take that as an affirmative response, since you won’t deny it.

Question: Is it the intention of Morgan Drexen to charge consumers and take fees for debt settlement services between the time a consumer enrolls and a debt is settled as specified in the new FTC TSR rules set to go into effect on October 27, 2010?

And while I’m clearing up misinformation, I never said I worked for any regulator, I said some of my readers are regulators and legislators. The same folks that are going to read my story about how or why you can’t answer my simple question to provide clarity about your very own press release.

Morgan Drexen Says Let’s Be Upfront About The Fees

As I was wrapping up this article I got yet another response from Morgan Drexen with their answer to the above. They said again, “Morgan Drexen, Inc. and the network of attorneys they provide automated software service too have always been, and will continue to work within the law.”

Oh yes, and I got this from the Morgan Drexen media department, “Your “running with you’re charging fees under the attorney exemption” is tantamount to a statement that Morgan Drexen intends too violate the law. As you have claimed your blog is read by regulators, such a story would be irresponsible and defamation of the highest order.

Of perforce, our legal department will be monitoring your publications for actionable statements.”

For the record, I never claimed, insinuated, or said that Morgan Drexen would be violating the law, I was asking for clarification on how they planned to proceed under the law since there are two possibilities.

This is from the FTC, “There’s no general exemption from the TSR for attorneys who engage in telemarketing. However, most attorneys are likely to fall outside the Rule for at least two reasons. First, the TSR applies only to providers who use interstate tele-marketing. Second, providers – including attorneys – who meet face-to-face with their customers before signing them up are likely exempt from most of the Rule’s provisions.” – Source

While Morgan Drexen says in their press release, “These regulations are a step towards protecting consumers and here at Morgan Drexen we encourage stringent regulations, which will prove to be challenging for these dishonorable companies”, they either can’t or won’t clearly answer with a simple yes or no if they or their network of attorneys specifically plan to not charge consumers prior to settling debts as specified under the new Federal Trade Commission rules.

Look, I get the fact Morgan Drexen says they are simply “an array of front end and back end services to law firms seeking to perform superior debt settlement solutions” (source) but certainly they can answer if it is their intention to participate in charging consumers in advance of consumers receiving bona fide debt settlement offers under the telemarketing sales rules.

Does anyone understand why Morgan Drexen would say false statements about me and threaten me and just not simply answer the question?

Do you think the statement from Morgan Drexen answers the question? Their statement once again, “Morgan Drexen and the network of attorneys they provide automated software service too have always been, and will continue to work within the law.”


Damon Day - Pro Debt Coach

Original Morgan Drexen Press Release

Morgan Drexen Says Let’s Be Upfront About The Fees

A New Federal Trade Commission Ruling Curbs Debt Settlement Companies. Unscrupulous Debt Settlement Companies can no Longer Charge an Upfront Fee for Their Services. Morgan Drexen Welcomes Any Protection for the Consumer.

Los Angeles, CA (Vocus) August 6, 2010 — Last week the Federal Trade Commission came down hard on unscrupulous debt settlement companies. From October 27th, new regulations will prevent debt settlement firms from charging up front fees.

General Counsel for Morgan Drexen, Inc. Jeffrey Katz says, “ These regulations are a step towards protecting consumers and here at Morgan Drexen we encourage stringent regulations, which will prove to be challenging for these dishonorable companies.”

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Morgan Drexen provides automated software support to attorneys across the nation. These attorneys are assisting consumers facing extreme financial difficulty. The attorneys provide debtors with a non-formal debt resolution program, which is an alternative to debt settlement. Helping consumers avoid the scar and adverse effects that bankruptcy brings. This also helps to avoid the risks involved with typical debt settlement companies.

In addition to no upfront fees, the regulations will also require debt settlement companies to tell the consumer how long the debt settlement will take.

Elizabeth Floyd an Illinois resident sought financial help from the Williamson Law Firm, who are supported by Morgan Drexen. Elizabeth recalled. “ I was told that the program would take 6 years to complete. Due to their expertise I completed in just 17 months. Those guys really helped me get rid of my debt.” For Robert Pegler it was a similar story. He enrolled with Brookstone Law in California. He was told that the program to rid him of debt would take 2 years; he was debt free in just 13 months.

Morgan Drexen CEO Walter Ledda is cheering on any regulations that protect the consumer. “Why would you withhold information as to how long it will take to make a consumer debt free? We support the idea of giving certain information freely. As part of the disclosure used by the attorneys we support this information is given upon request. These new regulations will certainly get rid of those companies who are not helping consumers, but lining their own pockets.”

Alison Brown a representative from the Federal Trade Commission says. “ The FTC brought forth this ruling based on public complaints and law enforcement actions. We think it will put the incentives in the right place. It will give an incentive for debt relief companies to work harder for the consumer.”

Ledda adds. “Any measure that is put in place to protect consumers is a good thing. Consumers across America need to be protected and educated when it comes to dealing with their finances.”

Media Contact: Raychel Harvey-Jones – Source

I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

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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.
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