Debt Relief Industry

FBL Associates and Evan Kagan, Esq. The Battle Continues. Majority of Surveys Say Clients Feel Misled.

One of the allegations in the ongoing battle between debt relief providers Frank Linder, Esq. of FBL Associates and Evan Kagan, Esq. is the allegation that customer data was stolen from FBL Associates and utilized by the offices of Kagan to persuade clients to leave FBL and join Kagan..

For a number of months I’ve been hearing rumors that the ESP Software that Linder and some others have used for their debt settlement activities was actually not secure and had been hacked. Since these rumors were from multiple sources it seemed plausible but I was unable to prove it. Apparently my proof comes now from Linder himself who alleges client data was stolen. FBL Associates previously said, “FBL Associates has been actively producing evidence and providing that to P&E Solutions and to the Broward County Sheriff’s Office regarding alleged identity theft of customer information from the ESP software system for telemarketing purposes.” – Source

Statements made by people intimately involved with ESP Software have told me over the past months that the software is and was not secure and alleged information has been stolen from the database eight or nine times. That information is said to have included personal information, credit card numbers, social security numbers, etc.

Another confidential tipster (send in your tips here) went so far to even say that they had specific information on data being hacked from the system of Lifeguard Financial, Safetrust Financial, P&E Solutions, ESP Software, and by extension, FBL Associates. This tipster (send in your tips here) has copies of damaging internal communications and data.

But there is an alternative revelation on how this all happened. A confidential source told me they were aware of a current or now past FBL Associates representative that had a administrative password and was using the NoteWorld system to gain access to FBL Associates client data and then allegedly selling it, directly or indirectly, to Kagan’s office. It might be that Kagan’s office or one of their affiliates was purchasing these leads which resulted in the pitch to switch and the luring of some consumers away from FBL Associates.

I asked Evan Kagan to comment on this theory but by the time of publication he has not responded. I also asked him if his office ever purchased leads from an outside provider, did he suspect a sales rep may be buying leads without his knowledge, and what internal action he would have taken if he was aware his office was buying leads that were really the client information of others, including FBL Associates. Again, I have not received a response from Kagan.

Another common statement I’ve received is from affiliates of FBL Associates who feel they have not been properly compensated or paid. Allegations have been made of residuals due affiliates or branch offices being directed away from them through the NoteWorld system. This seems possible since FBL Associates itself says in its letter to consumers that is agent abuses are found, “we will attempt to get some of your fees from the sales company to be deposited into your reserves.” – Source

Clearly there is more to the FBL Associates story than just a battle between Frank Linder, Esq. and Evan Kagan, Esq. And I’m not sure we’ll ever know the total truth about these allegations but I am confident in saying that due to the tips I’ve been receiving there is a lot more to know about the relationship between Frank Linder, Kevin Ellis, Efrain Garcia, Anthony Passero, Lifeguard Financial, Safetrust Financial, and ESP Software, that we should know.

Underlying all of this is the benefit of this classic example of what can happen when lawyers with law licenses to lose and disbarment to face, rely on sales agents to sell services. In debt relief where big bucks can be made by selling some types of services like debt settlement or legal debt elimination, sales agents will lie and mislead. The sales agent is compensated on the sale and is motivated to do whatever possible to make that sale and get the big dollars. I’m not sure if you can chalk it up to human nature or greed but seemingly all sales representatives, when paid by closed sales, will intentionally or unintentionally exaggerate to make the sale to feed their family. Latter, consumers will feel misled when they learn reality is different that the rosy claims made by the salesperson.

This Kagan/FBL situation is a perfect example why I think the “attorney model” approach put forth by Legal Helpers Debt Resolution (LHDR) to avoid FTC rules on limiting advanced fees when selling debt settlement services, is not only a horrible idea by LHDR, but just plain stupid. It’s going to blowup.

There is nothing good that seems to come out of lawyers having external sales staffs’ when providing any debt relief services. Lawyers that play in this ocean will be bitten as both Frank Linder and Evan Kagan have painfully found out.

The internet has an infinite memory and will never forget these allegations and comments made about these two attorneys. There reputations may have been harmed forever because of the debt relief services they provided by extension through external sales agents and representatives.

A Client Pitch to Switch

The following email below came from a representative that says a current FBL client received a pitch to switch to the services of Evan Kagan. The email sent to the FBL Associates client came from a company called Automated Financial Transaction but did include an attachment of a Consumer Handbook from The Law Offices of Evan Kagan and a link to Kagan’s Florida bar information.

The email also contains a link “To Verify Attorney Credentials With The State Bar Association Click Here.” The link takes you to the credential page of Evan Kagan.

Here is the full email that is alleged to have been sent to a consumer that was an FBL Associates client at the time and is still an FBL client today. The email was sent about a month ago.

From: Jason Cheely

It was a pleasure speaking with you today & it is my belief that we can definitely help you get out of the credit card nightmare it appears is plaguing you …… I have included a consumer handbook that should educate you somewhat on what it is the Law Firm will do to protect your rights, eliminate your debt, and in most cases gain damages paid to you the client. I will follow up with you this evening.

Regards,

Jason Cheely
Account Manager
Office: 623.516.4511
Toll free: 888.998.0730
Email: [email protected]

To Verify Attorney Credentials With The State Bar Association Click Here

Attachment: Evan Kagan, Esq. Consumer Handbook

The FBL Associates Customer Survey

In the recent documentation and information sent to me by FBL Associates they said they had a number of clients which had indicated on a client survey they had been contacted by Evan Kagan’s office. full survey had nineteen questions on it. The seventeen questions above those two questions about Kagan had been blocked out in my FBL provided information so I did not know what they were. Well now we know. Again, thanks to a tipster (send in your tips here), I have a copy of the entire survey which you can see below.

In the letter which FBL Associates sent out to clients with this survey it seems it was aimed at hunting out affiliates that might have misrepresented the services offered by FBL Associates to clients. See the cover letter below.



What is interesting is the statement FBL Associates is only an underlying service provider but will help to clawback fees paid to affiliates/sales agents. That seems like a lot of authority for just an underlying service provider that was “hired to support your automated debt settlement program.”

Another statement that stumps me is when FBL says “First, we are initiating an immediate investigation into whether or not people were misled by their sales agents. And if so, we are going to give your sales agents the opportunity to correct the problem.” That’s great but how do you un-ring the bell of deception. And how does a sales representative roll the transaction back to the point just before misleading the consumer and then right that wrong?

You can see an example of a returned survey below. A number of these redacted surveys were provided to me by FBL Associates.

The questions redacted that we had not seen before are:

  • Were you told by the sales agent that there was only a $49.00 fee for debt settlement services?
  • Did the sales agent fail to fully explain that there is a 15% upfront fee for services?
  • Did the sales agent fail to explain that your first three payments would predominately go to fees?
  • Were you told by the sales agent that your credit score would either improve or NOT be negatively impacted by debt settlement?
  • Were you told you would not be sued?
  • Were you told by the sales agent that you would be covered for all legal issues?
  • Were you informed by the sales agent that the creditor will stop harassing you?
  • Were you informed by the sales agent that you didn’t have to pay taxes on your settlements?
  • Were you informed by the sales agent that your creditors would be paid monthly?
  • Were you informed by the sales agent that your creditors would be paid before you completed the program as a loan?
  • Did you make a cash/check/credit card payment for an origination fee to the sales agent directly? If so, how much?
  • If you made the origination fee on a credit card were you told by the sales agent that you can enroll the credit card to the program?
  • Were you encouraged by the sales agent to charge up your credit cards to increase your balance before entering the debt settlement program?
  • Do you feel that you were misled by the sales agent about the program?
  • Were you told by your sales agent that the attorney settle your debt?
  • Were you told by your sales agent that settlements could be made by advances of monies by the debt settlement company?
  • Were you guaranteed by your sales agent that all creditors would settle with the debt settlement program? – Source

A Sampling of Survey Results

So it appears clear from those previously hidden questions that FBL Associates has some strong concerns over statements sales agents may have made to sell the client into the debt settlement program. Since we have a number of surveys given as evidence by FBL Associates on the alleged Evan Kagan issue, I thought it would be interesting to tally the responses to the redacted questions using the now provided questions as a key.

The results are:

Question

YES

NO

Were you told by the sales agent that there was only a $49.00 fee for debt settlement services?1511
   
Did the sales agent fail to fully explain that there is a 15% upfront fee for services?215
   
Did the sales agent fail to explain that your first three payments would predominately go to fees?198
   
Were you told by the sales agent that your credit score would either improve or NOT be negatively impacted by debt settlement?188
   
Were you told you would not be sued?1611
   
Were you told by the sales agent that you would be covered for all legal issues?234
   
Were you informed by the sales agent that the creditor will stop harassing you?198
   
Were you informed by the sales agent that you didn’t have to pay taxes on your settlements?520
   
Were you informed by the sales agent that your creditors would be paid monthly?324
   
Were you informed by the sales agent that your creditors would be paid before you completed the program as a loan?915
   
Did you make a cash/check/credit card payment for an origination fee to the sales agent directly? If so, how much?521
   
If you made the origination fee on a credit card were you told by the sales agent that you can enroll the credit card to the program?212
   
Were you encouraged by the sales agent to charge up your credit cards to increase your balance before entering the debt settlement program?420
   
Do you feel that you were misled by the sales agent about the program?252
   
Were you told by your sales agent that the attorney settle your debt?1611
   
Were you told by your sales agent that settlements could be made by advances of monies by the debt settlement company?1511
   
Were you guaranteed by your sales agent that all creditors would settle with the debt settlement program?252

How Much Did Consumers Pay in Origination Fees?

The completed survey sent to me below was outside of the FBL pool shows the consumer paid $3400+ in cash to the sales agent as an origination fee. They also indicate the sales agent told them to put the fee on a card included in the program and to run the card up prior to entering the program. The answers to their questions were not included in the results above. Interestingly they chose not to answer the question if they felt misled.

The Results of the Client Survey Appear Alarming

Now you need to bear in mind that the tabulations above were from a random sample of the surveys provided to me by FBL Associates, and not every client answered every question. I have no knowledge of the final scores of all the surveys returned to them by their customers.

But based on the answers provided and the key given to me of all the questions asked it appears that FBL Associates has specific knowledge of some very disturbing sales practices and that about 93% of clients feel they were misled by the sales agents.

Clearly the entire pool of clients they are servicing appears to be totally polluted by the bad acts of sales agents making false promises and statements to make the sale.

The majority of answers on the survey indicated clients:

  1. Did not understand what the fees were;
  2. Were not aware where the first three payments went;
  3. Believed their credit scores would go up or not be harmed;
  4. Thought they would be covered for all legal issues;
  5. Were told creditor collection/harassment calls would stop;
  6. Felt they had been misled;
  7. Thought that attorneys would settle the debts; and,
  8. Felt they had been guaranteed their creditors would settle.

The credit report issue alone looks like a slam dunk class action suit against FBL Associates and it’s agents for Credit Repair Organizations Act violations.

At this point I think FBL Associates needs to name the problematic underlying sales agents they found in their client survey or it seems this mess and sales deception otherwise lands on FBL Associates and Frank Linder, Esq.

There is no way to clean this up without either a class action suit by misled clients or for FBL Associates to come totally clean and lay out the entire mess so it can be addressed in an open and transparent way. If they do, I’ll cover it to show what steps they are taking.

Rather than focusing solely on the allegations of Kagan stealing their clients I think FBL Associates needs to direct all their energies on cleaning up the security breaches first. If they don’t that would just be irresponsible.

This means they’d have to stop taking on ANY new clients until they beef up database security, limited access into their NoteWorld account and changed all administrative passwords. I also think they would need a certification from a real outside data security company to verify their data is now really secure.

One Final FBL Associates Issue

I had previously written an article from a reader question that was concerned they could not get through to FBL Associates. In that article I listed the named attorneys FBL Associates listed as part of their company so he could locate an FBL Associates attorney in their state to get answers.

Following the publication I was surprised by some attorneys that came forward and made the following statements about being listed by FBL Associates as related attorneys.

  • “I should not be listed as a reserve attorney for FBL Associates. – Rinky S Parwani, Esq.”
  • “I have never earned a penny from that company, never represented their clients, and had no idea that they were using my name as one of their Kentucky attorneys. I’m very troubled by that. I think I may, at one time, discussed handling bankruptcies for them, but they never sent any to me, and I just had completely forgotten them until now. I deeply apologize to any of their clients who may have been misled by any inference by FBL that I was representing them. It appears my name was misused. – Heather R Estes, Esq.”
  • “I am an South Dakota attorney listed. I worked with them on one case for a while. I found that they did not know what they were doing, so I told them I could not work with them any longer. – Harry A Engberg, Esq.”
  • “Never affiliated. They have contacted me a number of times, but I never got a good feeling for the company so I passed on any offers for business. – Paul Lancia, Esq.” – Source

So were the attorneys listed by FBL Associates really onboard or were they just listed for show? Hum, another mystery to solve.

I’m sure this is not the last we will hear on this issue so be sure to subscribe to the site feed or emails using this link for updates.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.


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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About the author

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.

15 Comments

  • It would seem that I would agree with FBL on this matter. The question I have of FBL Associates is their ethics in the software world. Why would anybody develop software of this nature without utilizing data encryption? If the data was encrypted when entered by the consumer i.e. account numbers, social security number and the like, this information could not been used as alleged.

    My suspicion is that when P&E Software developed the software they rushed to get it to market. This could have been done for several reasons. The reasons could range from seeing a niche in an emerging market to trying to slam a Patent on the method utilized. In either case P&E made a fundamental error in the development and security features to protect the consumers of their product.

    Perhaps the principles of FBL Associates should ask P&E Solutions if they know of any other issues or liabilities that could arise from their continued use of this software. In reviewing all of previous articles about the companies that were spawned from Lifeguard; this would seem prudent measure.

  • Are you serious? You guys don’t do anything for anyone that they couldn’t do themselves, except steal their money. Get real…if I were to just stop paying my bills and save my money for 10 or 12 months, I could then call my credit card companies and tell them I can no longer pay. I could then tell them I have so much saved and would they accept a settlement. Banks are actually more willing to deal with their customer than an unlicensed agent when dealing with delinquent accounts. So to say the stuff you’ve said on here shows you are a real jokester. Stop lying and stealing from people and then trying to act like other people are the crooks–you are despicable!!!!!!!

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