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Home > Debt Relief Industry > Metron Services and Miracle Debt Group Hit With Class Action Suit for Debt Relief Activities

Metron Services and Miracle Debt Group Hit With Class Action Suit for Debt Relief Activities

Metron Services and Miracle Debt Group have just been sued. Here are the allegations from the suit. They might sound very familiar to some.

Allegations

By July 2009, Plaintiffs had accumulated consumer credit card debt totaling more than $101,000 (the “Debt”).

In July 2009, Plaintiffs received a mailed advertisement Miracle Debt wherein Miracle Debt claimed that it could settle consumer credit card debt quickly, at very low cost, and for a fraction of the amount actually owed to the credit card company. The advertisements contained Miracle Debt’s telephone number.

In July 2009, Plaintiffs further investigated by visiting websites www.miracledebt.com and www.metronservices.com (“Websites”).

The Websites stated that their programs are “an alternative to bankruptcy” that allowed a consumer to “free up cash flow” and promised to “lower your unsecured debts for pennies on the dollar.”

The Websites promised “a negotiation process that has been tested and developed over years of experience by our team of professionals in the field of finance and credit card debt.”

The Websites also advised that “Federal and state consumer laws were designed to protect the consumer. Miracle Debt Solutions utilizes these laws to protect you while your debt is in dispute.”

Miracle Debt counseled on its website that it is a “myth” that Miracle Debt’s debt management “can hurt your credit.”

Miracle Debt touted that its “experienced professionals” with “extensive knowledge in Federal and State Consumer Laws and exercise the Fair Credit Reporting Act, Fair Credit Billing Act, as well as the Fair Debt Collection Practices Act to help settle your debt.”

Miracle Debt also counseled against Bankruptcy on its site, noting “It will remain on your credit report for up to 10 years and you can be denied employment, state licenses, insurance, and tenancy of an apartment. Most importantly, you can be denied virtually any type of credit with a bankruptcy on your record. In addition, since bankruptcy laws have changed recently, it is even more difficult to qualify for Chapter 7… you will not be allowed to discharge alimony, child support… or any loan on the bankruptcy petition. Debt settlement is an attractive alternative to bankruptcy.”

The Miracle Debt website indicated that Miracle Debt could assist consumers in any location, including Missouri.

In July 2009, Plaintiffs contacted a Miracle Debt representative by telephone and disclosed details about their financial situation and the Debt.

At the time Plaintiffs contacted Miracle Debt, and all times relevant to this Complaint, Miracle Debt was unregistered as a debt adjuster as required by the Missouri Division of Finance such that Miracle Debt never posted a debt adjuster surety bond.

In order to induce Plaintiffs to use Miracle Debt’s service, the Miracle Debt representative counseled Plaintiffs that Miracle Debt could settle all accounts that made up the Debt in thirty-six months or less and instructed Plaintiffs to access an electronic version of a Metron Service Agreement (“Agreement”) on Miracle Debt’s website while the representative remained on the phone.

The Miracle Debt representative then analyzed the Agreement for Plaintiffs and pretended to explain the entire Agreement. The Miracle Debt representative hid from Plaintiffs the fact that the Agreement purported to contain a waiver of Plaintiffs’ right to sue Miracle Debt, an arbitration provision, a waiver of Plaintiffs’ right to participate in a class action lawsuit against Miracle Debt, a waiver of Plaintiffs’ right to participate in a class action arbitration against Miracle Debt, a waiver of Plaintiffs’ right to a trial by jury, and a waiver of Plaintiffs’ right to pursue any action against Miracle Debt whatsoever unless Plaintiffs pursued the action wherever Metron resided.

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Plaintiffs never saw and never agreed to the arbitration provision or the provisions waiving their right to a jury trial, waiving their right to participate in a class action in litigation or arbitration, and establishing San Francisco County as the venue for any dispute.

The Miracle Debt representative counseled Plaintiffs to stop paying their creditors immediately, and to forward monthly payments to Miracle Debt so that it could negotiate the Debt for Plaintiffs.

Based on Miracle Debt’s advertisements, the communications on the Website, and their conversations with the Miracle Debt representative that explained the Agreement, Plaintiffs elected to become a customer of Miracle Debt such that Miracle Debt would negotiate the Debt.

Miracle Debt presented the Agreement to Plaintiffs as a “take it or leave it” Agreement. Plaintiffs were powerless to make any changes or edits to the Agreement.

In addition to signing the Agreement, Miracle Debt required Plaintiffs to execute, and Plaintiffs did execute, a Power of Attorney that appointed Miracle Debt as Plaintiffs’ attorney in fact, with full power to represent them in negotiating the validity, reduction, settlement, and payment of the Debt.

In Months 1-3 of the program, referred to as “Phase 1″ by Miracle Debt, Plaintiffs would pay approximately $2,050 per month to Miracle Debt; of which more than 99.5 percent went directly to Miracle Debt as a “Program Fee.”

During Phase 1, Miracle Debt failed to make any payments to Plaintiffs’ creditors.

At minimum, Miracle Debt charged Plaintiffs a fee of 15 percent of the Debt.

Miracle Debt never disclosed to Plaintiffs how it often or in what amounts it would begin to actually pay down the Debt out of the monthly payments that Plaintiffs relinquished into Miracle Debt’s control. Miracle Debt’s Behavior is Class-Wide and Outrageous

Miracle Debt’s behavior with respect to Plaintiffs reflects Miracle Debt’s common and customary business practices in the State of Missouri. Miracle Debt’s dealings with Plaintiffs mirror Miracle Debt’s dealings with the class members.

In dealing with Plaintiffs and the class members, Miracle Debt knew that these people were in financial duress and were susceptible to being taken in by Miracle Debt’s predatory tactics.

The conduct of Miracle Debt when it dealt with Plaintiffs and the class members, especially given Miracle Debt’s deceptive and unfair advertising and sales techniques, Miracle Debt’s mischaracterization of the Agreement, and Miracle Debt’s repeated and unlawful assessment of fees, was outrageous in that Miracle Debt displayed a reckless indifference to the rights of Plaintiffs and the class members. – Source

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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.
  • Jason Taylor

    With all that is going on, they still have a video of Obama right on their home page.

    http://www.metronservices.com/

  • Jason Taylor

    With all that is going on, they still have a video of Obama right on their home page.

    http://www.metronservices.com/

  • Steve Rhode

    If there is “much more to this story than meets the eye” can you please share the details so we can put the recent suit into context? I want to make sure the facts are correct so please provide more information to help people not come to the wrong conclusion.

  • Damon Day

    Hello Scott,
    I guess we will have to see how it plays out in court. Unfortunately for you, you are in an industry where more likely than not, these allegations will be correct. So let me ask you a simple question. One of the allegations was that over 90% of the money the plaintiff paid into the service was taken in fees by the time the client decided to cancel. Is this true or is this not true? If it is not true, what was the percentage of the fees?

    You may or may not have settled thousands of consumer debts, but what I am interested in, and what is never disclosed, is what percentage does that represent? You have settled thousands of debts out of how many that you were paid to settle?

    Let me state for the record, I don’t know anything about your company, or this lawsuit, other than what the plaintiff alleges. However when a consumer states they signed up in a debt settlement program and most or all the money simply went toward fees, that is usually always true, because that is what a majority of settlement companies do.

    I am sure at some point, if it hasn’t been already, the original contract will be admitted into evidence in this case and then we can see exactly what Miracle Debt and Metron Services where signing clients up into.

    Since you feel that this lawsuit is untrue, and the allegations are false. Please take the time to share your side of the story and send over a copy of the blank contract you were using in 2009 when the plaintiff enrolled in your program. If the money paid in was not mostly all going to fees as the complaint alleges, then the contract will clear that up.

    We want to hear both sides of the issue.

  • Scott Haberman

    The allegations contained in the lawsuit are untrue and this is yet another attempt on the part of what we believe to be an uninformed lawyer to make false accusations for personal gain. There is much more to this story than meets the eye and before Getoutdebt.org or anyone else jumps to conclusions, it should get all of the facts straight including all of the relationships of the parties. Both Miracle Debt and Metron Services stand by their claims and statements posted on their websites and have a strong track record of settling thousands of consumer debts for their clients.

  • Scott Haberman

    The allegations contained in the lawsuit are untrue and this is yet another attempt on the part of what we believe to be an uninformed lawyer to make false accusations for personal gain. There is much more to this story than meets the eye and before Getoutdebt.org or anyone else jumps to conclusions, it should get all of the facts straight including all of the relationships of the parties. Both Miracle Debt and Metron Services stand by their claims and statements posted on their websites and have a strong track record of settling thousands of consumer debts for their clients.

    • http://DamonDay.com Damon Day

      Hello Scott,
      I guess we will have to see how it plays out in court. Unfortunately for you, you are in an industry where more likely than not, these allegations will be correct. So let me ask you a simple question. One of the allegations was that over 90% of the money the plaintiff paid into the service was taken in fees by the time the client decided to cancel. Is this true or is this not true? If it is not true, what was the percentage of the fees?

      You may or may not have settled thousands of consumer debts, but what I am interested in, and what is never disclosed, is what percentage does that represent? You have settled thousands of debts out of how many that you were paid to settle?

      Let me state for the record, I don’t know anything about your company, or this lawsuit, other than what the plaintiff alleges. However when a consumer states they signed up in a debt settlement program and most or all the money simply went toward fees, that is usually always true, because that is what a majority of settlement companies do.

      I am sure at some point, if it hasn’t been already, the original contract will be admitted into evidence in this case and then we can see exactly what Miracle Debt and Metron Services where signing clients up into.

      Since you feel that this lawsuit is untrue, and the allegations are false. Please take the time to share your side of the story and send over a copy of the blank contract you were using in 2009 when the plaintiff enrolled in your program. If the money paid in was not mostly all going to fees as the complaint alleges, then the contract will clear that up.

      We want to hear both sides of the issue.

    • http://GetOutOfDebt.org Steve Rhode

      If there is “much more to this story than meets the eye” can you please share the details so we can put the recent suit into context? I want to make sure the facts are correct so please provide more information to help people not come to the wrong conclusion.

  • Damon Day

    It is nice to see a consumer turning the tables on these rip off programs for a change. Notice in the complaint the attorney is seeking to turn it into a class action and is asking for 7,000,000 in damages. My crystal ball tells me that this company is not going to be in business very much longer, if they are still even in business now that the FTC law is in effect.

  • http://DamonDay.com Damon Day

    It is nice to see a consumer turning the tables on these rip off programs for a change. Notice in the complaint the attorney is seeking to turn it into a class action and is asking for 7,000,000 in damages. My crystal ball tells me that this company is not going to be in business very much longer, if they are still even in business now that the FTC law is in effect.

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