Business Models Debt Relief Industry

I Am An Attorney Affiliate of Legal Helpers Debt Resolution (LHDR) But Have Concerns

“Dear Steve,

I am an attorney affiliate for LHDR. They have told me that it complies with FTC regulation because I am having a face to face meeting.

In addition they have added a litigation defense clause in their agreement so it is not merely a loop hole to the FTC.

My concern is after the fees are paid what incentive do they have to continue providing relief for the client? They have a law license which if they dont abide by the agreemet can be easily reported to the Bar Ethics committee but that hasn’t stopped them from being branded on these websites.

I am concerned that in a year or two from now I might be drawn into this mess from unhappy clients.

More so this new model has not been tested so I don’t have much to go on. I need to sleep at night with a moral God fearing conscience and I do explain and disclose all the pitfalls and possible benefits of the program with its defense litigation but I am still wary.

Might you have any insight? Suppossedly they have thousands of clients monthly and so a b+ rating from the BBB doesnt seem too bad. I would like your professional opinion.

Thanks.

X, Esq.”

Dear X,

Thank you for your question. Some people think I am against Legal Helpers Debt Resolution, I’m not. I sincerely hope they offer a consumer service with tremendous benefits and consumers receive value for it.

There are four sides to this situation. We have the consumer, the attorney, the company, and the marketer.

From a company point of view, all along my issue with LHDR has not been if they have a well thought out plan. They are smart guys and have probably done a fantastic job of trying to work their way around the FTC telemarketing sales rules.

The consumer side is interesting. From a regulator point of view, consumers with financial problems are considered to be a disadvantaged class of people that need to be protected from opportunists.

If a debt relief company wants to avoid consequences and negative publicity then the transaction between the consumer and provider must be simple, easy to understand, not overly complicated and most importantly it must offer a full and total refund to any consumer that has any issue. Consumers that get full refunds generally don’t complain.

Attorneys that participate are gambling with their reputation and license. There are certainly enough examples of attorneys being sanctioned and disbarred from debt relief activities. Read “The Critical Flaw in The Attorney Model for Debt Settlement” for more information. In your case your risk lies not with the relationship with the company, or the consumer, but with the relationship with the fourth party, the marketer.

READ  Missouri Sues Mortgage Law Group and Legal Helpers Debt Resolution

LHDR was sold and promoted to affiliates as the way to get around the FTC TSR advanced fee rules to marketers. The sales people it has attracted are many of the same representatives that have bent logic and made statements to consumers in the past to make the sale. In the debt relief industry there is no room for performance compensation. If sales and affiliates are paid by the number of deals they bring to the table they will lie and misrepresent the facts to close the sale. This is not a prediction of the future but a statement of fact from the past. All you have to do is listen to any of the undercover calls I’ve made to hear what the salesperson says. And that’s the weakest link.

So you are not staking your license and reputation on the company, your capabilities, or the consumer. You are betting everything on praying the sales person does not lie or stretch the truth.

If the salesperson does, and they will, the consumer will have unrealistic expectations, that will lead to disappointment, disappointment leads to complaints, complaints lead to bar complaints, and so on. It seems you also have no authority to require LHDR to make a full refund to any unhappy client so like it or not, you will probably be part of a future complaint.

You need to ask yourself, if the debt settlement service is so great then why does LHDR need to create a model that collects the fee up-front. What’s wrong with performing the service and being paid a fair rate for that?

Recently the state of North Carolina filed suit against Consumer Law Group. And in the complaint they laid out some good arguments that others might copy. If your state applied the same standards for your relationship with the client, would you meet them?

“Despite the promises of legal representation, none of the defendants are licensed to practice law in North Carolina. On information and belief, defendants have occasionally referred a few of their North Carolina clients to a North Carolina attorney for purposes of bankruptcy representation or other assistance.

  • The North Carolina referral attorney has his own independent North Carolina law firm;
  • he has no attorney-cleint relationship with CLG’s customers;
  • he does not handle any funds received by CLG from its North Carolina customers;
  • he does not meet with, talk with, or have any other contact with any of CLG’s North Carolina customers, except on a very occasional basis;
  • he does not negotiate with third party creditors on behalf of CLG’s North Carolina customer;
  • and he is not otherwise involved with the operation of CLG’s debt settlement program.”

Source

So as an affiliate attorney, is your job to have the type of relationship with the consumer above or are you simply being used to allow a “loophole” strategy to be executed?

You asked, “My concern is after the fees are paid what incentive do they have to continue providing relief for the client?” The answer is, none.

The front-loaded fee models fail because the fees from consumers are spent before the services are fully delivered. Money is paid out in-full to marketers, the company, etc. before the consumer receives all the services promised. A front-loaded model would not be so bad if the company escrowed fees until actually earned through the entire client relationship and the front-loaded payment of fees did not prevent consumers from making settlements quickly.

Historically the front-loaded debt settlement fee model has been akin to a Ponzi scheme. Fees are generated and taken, new clients must be brought in to generate new fees to now pay for services for clients whose fees were taken before, and repeat.

Eventually what you wind up with is a big beast that is dragging along client obligations as a liability but is not generating sufficient income to pay them all off and requires new sales to remain moving ahead.

So what happens when clients will bail in the future and refunds will be hard to get or just flat out refused by LHDR for a client you touched? And we know what a lack of prompt refunds gets you, that’s right, reported and a bad reputation.

Do you really want to be a party to people that follow this process?

You say LHDR has a B+ rating but that’s not quite true. They also have an F rating with the BBB. See this story. So if the LHDR argument is going to be that the site in that article is actually one put together by an affiliate, that just proves my point about marketers placing you at risk.

So what do you think now?


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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.

30 Comments

  • Interesting claims, I’m currently in a debt resolution plan with LHDR, I’ve deposited so far an EXTA $5500 into my plan beyond my monthly installments, I’ve oly been in the plan since March of this year and my accounts weren’t past due when I started. My fees are 10% of the debt amount when I enrolled and that fee was spread out over almost 2 years. Now I enrolled about $88000 in teh plan and I have settled just over half that already BUT I’m totaly being sued right noe by a creditor AND LHDR totally won’t represent me in court or even advise me how to handle the lawsuit. ALSO, funny thing is, after I deposited a large sum of money into my account with them, a creditor called me and offered me 30% settlement on a large bill and said they refuse to deal with LHDR. I called LHDR and was told by their paralegal that if I took that settlement, I’d damage our attorney client relationship AND that if I had extra money, they shoul dpay citibank because citibank was trying to sue. Well I didn’t want to get sued so I didn’t take that settlement myself and instead deposited the money so I wouldn’t get sued. Well they took that money and settled 3 other accounts with it…INSTEAD OF settling with citibank. Well now theres no money left in my account because LHDR spent it on other settlements and now I’m being sued by citibank, I have to go to court next week and I have no attorney. I’m just saying, LHDR has it’s flaws. They did settle my other accounts at great percentages but I’m not enjoying being sued with no representation.

  • Wow great questions from Observer! I am really looking forward to seeing Legal Helper’s answers.

    I heard these guys have 10 million set aside to fight the FTC and a member on the board of the American Bar Association, but I don’t know if either is true or not. If so the battle is going to be interesting- but it will be like watching a football game of two teams that are not your favorite.

  • Jason,

    Someone just sent me your bio. Very impressive. Your participation in this conversation will be very informative and helpful.

    The bio they sent said:

    “Jason is the Managing Partner and General Counsel of Legal Helpers Debt Resolution. Jason brings with him a wealth of knowledge and experience pertaining to the multijurisdictional practice of law. He is the former General Counsel for We The People USA, the largest consumer legal document preparation service in the country and was Special counsel to Sokolove Law, the largest consumer personal injury firm in the nation. He was an advocate for the rights of consumers and negotiated their rights to obtain appropriate debt resolution services in Washington D.C and in twenty two states.”

    Looks like you are the right guy to know.

    Steve

  • Hi Jason,

    You have contributed a very cogent representation of the firm as you see it.

    At your invitation, I would pose a few questions to you:

    Does LHDR work and/or affiliate itself with call centers and/or sales associates whose purpose is to sell LHDR services nationwide?

    Does LHDR compensate sales associates/affiliates? If so, what is the commission structure payout and time lines for payment? Is this payout set at different levels of performance i.e amount of client conversions in a set calendar period?

    Are sales and/or marketing/advertising partners compensated in accordance with all state and/or bar guidelines for legal advertisement? Wisconsin would provide a good test.

    Do sales associates/affiliate marketers for LHDR make presentations to potential LHDR clients over the phone either intra or inter state? If so, is that presentation repeated in any meaningful way in follow up face to face meetings?

    Are potential LHDR clients meeting with an LHDR attorney representative in any face to face meeting designed as a follow up to a telephone presentation?

    Are you aware that many of the marketing partners looking for a home and source of profit under the amended TSR regime may now be affiliated with LHDR?

    Your comment above, “major problem with the debt settlement industry is overzealous marketing groups and companies taking large upfront fees with no assurance of resolving the consumer’s debt” would lead me to assume you are aware of these groups. Are you aware that you may be working with the very same groups your comment holds in disdain?

    Your comment above, “We also provide our clients full legal representation in the event they are sued by any creditor as a part of our flat fees” begs several questions:

    Does your flat fee, after all marketers/affiliates are paid, provide for anything more than pleadings and motion practice? If travel is necessary to represent an LHDR client 6 counties away, are LHDR affiliated attorneys compensated? Lodging? Trial preparations? Depositions?

    Who provides actual negotiation services to LHDR clients? Does the LHDR affiliate attorney or the staff under their direct supervision in each respective jurisdiction engage in the negotiation/settlement service in any meaningful way? Is the negotiation/client service work flow out sourced? If so, to who?

    Are LHDR debt settlement and negotiation services instigated with original creditors? With Chase, Discover, Citi, Capone, Regional credit unions?

    What is the fee schedule charged to an LHDR debt settlement client? I have heard mention of the different amounts, but have not verified them. Perhaps you can assist in fee verification? I had heard there are upfront fees in excess of 1000.00, up to 180.00 monthly maintenance and 25% of savings. How does 25% of savings, if that is a portion of the LHDR fee, square with the definition of a flat fee?

    Your comment, “LHDR guarantees a minimum performance standard for our clients enrolled under the traditional fee model. If LHDR cannot achieve at least a 35% reduction for a particular scheduled debt, we will refund the full amount of the fee allocated for that account to the client, and will still resolve that debt at no cost to the client” lacks clarity.
    Is the guaranteed 35% reduction based on the balance of a scheduled debt at the time it is enrolled or based on the savings at the time settlement is achieved? As I am sure you are aware, balance accretion is a real concern. So much so that the permissible fee set forth by the FTC when charging a percentage of savings must be based on the difference between the final settlement amount and the balance at the time the debt was enrolled. Can you provide the formula for fee allocation when contemplating a refund under your minimum performance standard?

    I would like to offer a different view of your comment above, “The goal of the recent FTC TSR and multiple state regulations is to protect consumers from such deceptive practices”.
    The states and FTC have labeled charging of fees in advance of providing direct debt settlement as abusive. There are narrow carve outs and exemptions for attorneys. A full read of the final rule and the rule making commentary suggests these narrow carve outs are designed for attorneys serving their local community in the regular course of business. In fact, the rule and commentary suggest that efforts to self define ones business practices as meeting these narrow exemptions while marketing over the phone and at a national level will be heavily monitored and targeted for compliance investigations.

    Is LHDR prepared for heavy scrutiny of its business practices? Are the attorneys who choose to affiliate with LHDR prepared for same? How about the marketing partners?

  • Question: Why did Mr. Macy say earlier:
    Thomas Macey 08/19/2010 09:30 PM
    Mr. Day…for the record post 10/27 Legal Helpers Debt Resolution will not be front loading their fees and charging 15% of the scheduled debt. I would only ask that you withhold passing judgement on a model that you havent seen yet. Once its released to the public I believe you will be happy with its results.
    Why not promote a plan on a performance based model?
    Why use affiliates to sell your services?
    Why so many customer service issues from your previous model?
    You say “We believe that too often debt settlement has been offered to unsophisticated consumers as the only option by marketing groups and companies, often trying to insert the proverbial “square peg into a round hole”. ”
    -Really? When did you begin to believe this? Right after partnering with Total BK? Because before that, your affiliates were ONLY producing debt settlement WITHOUT representation?

    You wrote a lovely note here but your reputation precedes it. Perhaps after actually helping consumers for a few YEARS, you can make the claim that you weren’t taking advantage of your own clients. To date, you have. I know your affiliates, their qualifications, their direction & their motivation. So here’s a question, how are you legally paying your affiliates? You can’t split fees with them right? Yet, you are.

    Correct me where i’m wrong please.

  • Thank you for commenting. Your feedback and response to any post is welcome. I especially encourage your participation in some of the conversations where questions have been raised that could benefit from direct answers.

    For example, in this post, Attorney X has asked a good question that only you can answer. Attorney X said “My concern is after the fees are paid what incentive do they have to continue providing relief for the client?”

    Steve

  • Dear Mr. Rhodes:

    At Legal Helpers Debt Resolution, LLC (Macey, Aleman, Hyslip & Searns), we are regular followers of your blog. We admire that your website has become an indispensible location for consumers interested in learning more about debt settlement. We read and appreciated your piece last week that addressed the debt settlement industry in general, and our firm in particular. We thought you and your readers would appreciate learning more about our law firm.

    LHDR’s mission is to provide full service debt resolution for clients including bankruptcy, debt negotiation, debt management plans and consumer financial workouts tailored to the specific circumstances and desires of our clients. We believe that too often debt settlement has been offered to unsophisticated consumers as the only option by marketing groups and companies, often trying to insert the proverbial “square peg into a round hole”.

    We fully agree with your assessment that the major problem with the debt settlement industry is overzealous marketing groups and companies taking large upfront fees with no assurance of resolving the consumer’s debt. The goal of the recent FTC TSR and multiple state regulations is to protect consumers from such deceptive practices.

    LHDR is a national law firm with attorneys in a physical office in every state. Our law firm meets with each client in their own community to review their particular financial circumstances and determine which approach is consistent with our client’s goals. We also provide our clients full legal representation in the event they are sued by any creditor as a part of our flat fees.

    LHDR guarantees a minimum performance standard for our clients enrolled under the traditional fee model. If LHDR cannot achieve at least a 35% reduction for a particular scheduled debt, we will refund the full amount of the fee allocated for that account to the client, and will still resolve that debt at no cost to the client. Moreover, under LHDR’s fee model, all clients start savings plans in their first month of representation to accomplish quicker debt resolution thresholds.

    LHDR respects our client’s desire to find an alternative to Chapter 7 bankruptcy as a financial workout of their debt. However, in the event of a change in a client’s financial position or circumstance, such as a loss of employment, we will credit a portion of the client’s fee to the cost of bankruptcy services to be rendered by Legal Helpers, P.C., which is the nation’s largest bankruptcy firm.

    We appreciate this opportunity to present this information to you and your readers, and welcome any questions or comments.

  • Dear Mr. Rhodes:

    At Legal Helpers Debt Resolution, LLC (Macey, Aleman, Hyslip & Searns), we are regular followers of your blog. We admire that your website has become an indispensible location for consumers interested in learning more about debt settlement. We read and appreciated your piece last week that addressed the debt settlement industry in general, and our firm in particular. We thought you and your readers would appreciate learning more about our law firm.

    LHDR’s mission is to provide full service debt resolution for clients including bankruptcy, debt negotiation, debt management plans and consumer financial workouts tailored to the specific circumstances and desires of our clients. We believe that too often debt settlement has been offered to unsophisticated consumers as the only option by marketing groups and companies, often trying to insert the proverbial “square peg into a round hole”.

    We fully agree with your assessment that the major problem with the debt settlement industry is overzealous marketing groups and companies taking large upfront fees with no assurance of resolving the consumer’s debt. The goal of the recent FTC TSR and multiple state regulations is to protect consumers from such deceptive practices.

    LHDR is a national law firm with attorneys in a physical office in every state. Our law firm meets with each client in their own community to review their particular financial circumstances and determine which approach is consistent with our client’s goals. We also provide our clients full legal representation in the event they are sued by any creditor as a part of our flat fees.

    LHDR guarantees a minimum performance standard for our clients enrolled under the traditional fee model. If LHDR cannot achieve at least a 35% reduction for a particular scheduled debt, we will refund the full amount of the fee allocated for that account to the client, and will still resolve that debt at no cost to the client. Moreover, under LHDR’s fee model, all clients start savings plans in their first month of representation to accomplish quicker debt resolution thresholds.

    LHDR respects our client’s desire to find an alternative to Chapter 7 bankruptcy as a financial workout of their debt. However, in the event of a change in a client’s financial position or circumstance, such as a loss of employment, we will credit a portion of the client’s fee to the cost of bankruptcy services to be rendered by Legal Helpers, P.C., which is the nation’s largest bankruptcy firm.

    We appreciate this opportunity to present this information to you and your readers, and welcome any questions or comments.

    • Thank you for commenting. Your feedback and response to any post is welcome. I especially encourage your participation in some of the conversations where questions have been raised that could benefit from direct answers.

      For example, in this post, Attorney X has asked a good question that only you can answer. Attorney X said “My concern is after the fees are paid what incentive do they have to continue providing relief for the client?”

      Steve

    • Question: Why did Mr. Macy say earlier:
      Thomas Macey 08/19/2010 09:30 PM
      Mr. Day…for the record post 10/27 Legal Helpers Debt Resolution will not be front loading their fees and charging 15% of the scheduled debt. I would only ask that you withhold passing judgement on a model that you havent seen yet. Once its released to the public I believe you will be happy with its results.
      Why not promote a plan on a performance based model?
      Why use affiliates to sell your services?
      Why so many customer service issues from your previous model?
      You say “We believe that too often debt settlement has been offered to unsophisticated consumers as the only option by marketing groups and companies, often trying to insert the proverbial “square peg into a round hole”. ”
      -Really? When did you begin to believe this? Right after partnering with Total BK? Because before that, your affiliates were ONLY producing debt settlement WITHOUT representation?

      You wrote a lovely note here but your reputation precedes it. Perhaps after actually helping consumers for a few YEARS, you can make the claim that you weren’t taking advantage of your own clients. To date, you have. I know your affiliates, their qualifications, their direction & their motivation. So here’s a question, how are you legally paying your affiliates? You can’t split fees with them right? Yet, you are.

      Correct me where i’m wrong please.

    • Hi Jason,

      You have contributed a very cogent representation of the firm as you see it.

      At your invitation, I would pose a few questions to you:

      Does LHDR work and/or affiliate itself with call centers and/or sales associates whose purpose is to sell LHDR services nationwide?

      Does LHDR compensate sales associates/affiliates? If so, what is the commission structure payout and time lines for payment? Is this payout set at different levels of performance i.e amount of client conversions in a set calendar period?

      Are sales and/or marketing/advertising partners compensated in accordance with all state and/or bar guidelines for legal advertisement? Wisconsin would provide a good test.

      Do sales associates/affiliate marketers for LHDR make presentations to potential LHDR clients over the phone either intra or inter state? If so, is that presentation repeated in any meaningful way in follow up face to face meetings?

      Are potential LHDR clients meeting with an LHDR attorney representative in any face to face meeting designed as a follow up to a telephone presentation?

      Are you aware that many of the marketing partners looking for a home and source of profit under the amended TSR regime may now be affiliated with LHDR?

      Your comment above, “major problem with the debt settlement industry is overzealous marketing groups and companies taking large upfront fees with no assurance of resolving the consumer’s debt” would lead me to assume you are aware of these groups. Are you aware that you may be working with the very same groups your comment holds in disdain?

      Your comment above, “We also provide our clients full legal representation in the event they are sued by any creditor as a part of our flat fees” begs several questions:

      Does your flat fee, after all marketers/affiliates are paid, provide for anything more than pleadings and motion practice? If travel is necessary to represent an LHDR client 6 counties away, are LHDR affiliated attorneys compensated? Lodging? Trial preparations? Depositions?

      Who provides actual negotiation services to LHDR clients? Does the LHDR affiliate attorney or the staff under their direct supervision in each respective jurisdiction engage in the negotiation/settlement service in any meaningful way? Is the negotiation/client service work flow out sourced? If so, to who?

      Are LHDR debt settlement and negotiation services instigated with original creditors? With Chase, Discover, Citi, Capone, Regional credit unions?

      What is the fee schedule charged to an LHDR debt settlement client? I have heard mention of the different amounts, but have not verified them. Perhaps you can assist in fee verification? I had heard there are upfront fees in excess of 1000.00, up to 180.00 monthly maintenance and 25% of savings. How does 25% of savings, if that is a portion of the LHDR fee, square with the definition of a flat fee?

      Your comment, “LHDR guarantees a minimum performance standard for our clients enrolled under the traditional fee model. If LHDR cannot achieve at least a 35% reduction for a particular scheduled debt, we will refund the full amount of the fee allocated for that account to the client, and will still resolve that debt at no cost to the client” lacks clarity.
      Is the guaranteed 35% reduction based on the balance of a scheduled debt at the time it is enrolled or based on the savings at the time settlement is achieved? As I am sure you are aware, balance accretion is a real concern. So much so that the permissible fee set forth by the FTC when charging a percentage of savings must be based on the difference between the final settlement amount and the balance at the time the debt was enrolled. Can you provide the formula for fee allocation when contemplating a refund under your minimum performance standard?

      I would like to offer a different view of your comment above, “The goal of the recent FTC TSR and multiple state regulations is to protect consumers from such deceptive practices”.
      The states and FTC have labeled charging of fees in advance of providing direct debt settlement as abusive. There are narrow carve outs and exemptions for attorneys. A full read of the final rule and the rule making commentary suggests these narrow carve outs are designed for attorneys serving their local community in the regular course of business. In fact, the rule and commentary suggest that efforts to self define ones business practices as meeting these narrow exemptions while marketing over the phone and at a national level will be heavily monitored and targeted for compliance investigations.

      Is LHDR prepared for heavy scrutiny of its business practices? Are the attorneys who choose to affiliate with LHDR prepared for same? How about the marketing partners?

      • Wow great questions from Observer! I am really looking forward to seeing Legal Helper’s answers.

        I heard these guys have 10 million set aside to fight the FTC and a member on the board of the American Bar Association, but I don’t know if either is true or not. If so the battle is going to be interesting- but it will be like watching a football game of two teams that are not your favorite.

    • Jason,

      Someone just sent me your bio. Very impressive. Your participation in this conversation will be very informative and helpful.

      The bio they sent said:

      “Jason is the Managing Partner and General Counsel of Legal Helpers Debt Resolution. Jason brings with him a wealth of knowledge and experience pertaining to the multijurisdictional practice of law. He is the former General Counsel for We The People USA, the largest consumer legal document preparation service in the country and was Special counsel to Sokolove Law, the largest consumer personal injury firm in the nation. He was an advocate for the rights of consumers and negotiated their rights to obtain appropriate debt resolution services in Washington D.C and in twenty two states.”

      Looks like you are the right guy to know.

      Steve

    • Interesting claims, I’m currently in a debt resolution plan with LHDR, I’ve deposited so far an EXTA $5500 into my plan beyond my monthly installments, I’ve oly been in the plan since March of this year and my accounts weren’t past due when I started. My fees are 10% of the debt amount when I enrolled and that fee was spread out over almost 2 years. Now I enrolled about $88000 in teh plan and I have settled just over half that already BUT I’m totaly being sued right noe by a creditor AND LHDR totally won’t represent me in court or even advise me how to handle the lawsuit. ALSO, funny thing is, after I deposited a large sum of money into my account with them, a creditor called me and offered me 30% settlement on a large bill and said they refuse to deal with LHDR. I called LHDR and was told by their paralegal that if I took that settlement, I’d damage our attorney client relationship AND that if I had extra money, they shoul dpay citibank because citibank was trying to sue. Well I didn’t want to get sued so I didn’t take that settlement myself and instead deposited the money so I wouldn’t get sued. Well they took that money and settled 3 other accounts with it…INSTEAD OF settling with citibank. Well now theres no money left in my account because LHDR spent it on other settlements and now I’m being sued by citibank, I have to go to court next week and I have no attorney. I’m just saying, LHDR has it’s flaws. They did settle my other accounts at great percentages but I’m not enjoying being sued with no representation.

  • Attorney X,
    The most important point to understand about debt settlement can be summarized in one sentence: Up until the advance fee ban, 80%-90% of clients did not graduate the program. Does that sound moral to you?

  • Attorney X,
    The most important point to understand about debt settlement can be summarized in one sentence: Up until the advance fee ban, 80%-90% of clients did not graduate the program. Does that sound moral to you?

  • Hi X,

    Committing your good name, bar license, along with your time and energy, to an affiliate(s), call center(s), sales group(s) operating at a national level, will typically end badly.

    The sales groups who provide no substantive debt relief service, but demand high commissions of between 50 and 80% of client fees are what has destroyed the industry for the most part.
    They are what led to the need for state and federal regulation. They are what has led to the flood of negative bias by the media and consumer groups. They are likely what led to the formation of LHDR and even your posting a question to Steve.

    Here is what you need to grasp:
    Any company looking to capitalize on the narrow carve out for attorneys in state and federal rules and where up front fees are being charged is not acting within the spirit of the rules and laws and will be heavily scrutinized.

    The marketers, not actual service providers, have been running the industry for the past many years. They have increasingly exposed attorneys to liability in one form or another. That will end, I have no doubt. Will it end because of enforcement actions by the FTC and the states, or will it end because the industry as a whole gets taken out back and shot by an even more aggressive regulatory environment? Time will tell.

    By the way, you answered your own question above, before you even hit submit:
    “with a moral God fearing conscience” – now just act accordingly.

  • Hi X,

    Committing your good name, bar license, along with your time and energy, to an affiliate(s), call center(s), sales group(s) operating at a national level, will typically end badly.

    The sales groups who provide no substantive debt relief service, but demand high commissions of between 50 and 80% of client fees are what has destroyed the industry for the most part.
    They are what led to the need for state and federal regulation. They are what has led to the flood of negative bias by the media and consumer groups. They are likely what led to the formation of LHDR and even your posting a question to Steve.

    Here is what you need to grasp:
    Any company looking to capitalize on the narrow carve out for attorneys in state and federal rules and where up front fees are being charged is not acting within the spirit of the rules and laws and will be heavily scrutinized.

    The marketers, not actual service providers, have been running the industry for the past many years. They have increasingly exposed attorneys to liability in one form or another. That will end, I have no doubt. Will it end because of enforcement actions by the FTC and the states, or will it end because the industry as a whole gets taken out back and shot by an even more aggressive regulatory environment? Time will tell.

    By the way, you answered your own question above, before you even hit submit:
    “with a moral God fearing conscience” – now just act accordingly.

  • Attorney X,

    Debt Settlement only works when the client has money accumulated to settle an account. The reason the industry has such a bad name is very simple…. Regardless if you are an attorney or Debt Settlement company, if you are collecting fees up front, nothing (or very little) is being accumulated and when a summons is sent the client is screwed. Great, they have an attorney to file an answer or two but what happens to the client when there is no money available to settle? Judgments/Garnishments/Bank Levies…But hey, at least you got paid. Involving attorneys is simply a way to circumvent the FTC ban on upfront fees. I have a feeling a lot of attorneys will be losing their licenses over the next year or so. I love people watching!!

  • Attorney X,

    Debt Settlement only works when the client has money accumulated to settle an account. The reason the industry has such a bad name is very simple…. Regardless if you are an attorney or Debt Settlement company, if you are collecting fees up front, nothing (or very little) is being accumulated and when a summons is sent the client is screwed. Great, they have an attorney to file an answer or two but what happens to the client when there is no money available to settle? Judgments/Garnishments/Bank Levies…But hey, at least you got paid. Involving attorneys is simply a way to circumvent the FTC ban on upfront fees. I have a feeling a lot of attorneys will be losing their licenses over the next year or so. I love people watching!!

  • They have more than 37 BBB sites- The main one has an F with over 100 complaints. One, a year ols has 9 complaints and a B, almost all others are No Rating or F-
    Hitch your wagon to a star…..

  • They have more than 37 BBB sites- The main one has an F with over 100 complaints. One, a year ols has 9 complaints and a B, almost all others are No Rating or F-
    Hitch your wagon to a star…..

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