Back in May of 2010, Brett and Linda Davis filed a class action suit against Global Client Solutions, GHS Solutions, and Rocky Mountain Bank & Trust.
The suit said: “Defendants are engaged in a continuing class-wide predatory business scheme to financially enrich themselves and defraud Kentucky Class members by violating Kentucky’s Debt Adjusting statute, Chapter 380; by the commission of unfair and deceptive practices in violation of Kentucky’s Consumer Protection Act, Chapter 367; and, by aiding and abetting in and conspiring to violate Chapters 367 and 380.” – Source
The case is ongoing.
But just recently GHS Solutions, Global Client Solutions, and Rocky Mountain Bank & Trust tried to get the court to enforce the arbitration agreement contained in the contracts. The court shut them down cold.
The suit arises out of Plaintiffs’ participation in a debt settlement program. Subsequently, GHS, Global and Rocky Mountain have moved to compel arbitration.
These motions raise a host of questions concerning the enforcement of arbitration agreements, which Kentucky courts generally favor. However, the policy favoring arbitration must give way where the agreement to do so is procedurally or substantively unconscionable.
For the reasons that follow, the Court will not enforce these arbitration agreements.
This case brings up the shared liability between the marketer, debt relief company and backend vendors when a situation goes bad.
The court summary as part of the motion helps to give the short notes on this case.
In early 2009, Plaintiffs found themselves in a difficult financial situation due to, among other things, overwhelming credit card debt. Plaintiffs searched for a way to ease the debt, and after responding to an advertisement, a GHS representative contacted them. GHS offers a debt settlement service, whereby it negotiates settlements with the creditors of its customers. GHS is a Florida corporation with its principal place of business in Delray Beach, Florida. It is not licensed to do business in Kentucky and is not licensed as a debt adjuster. After the initial contact between GHS and Plaintiffs, the parties continued to communicate via telephone and email. GHS claims that Plaintiffs signed the GHS Client Service Agreement on March 12, 2009. Plaintiffs deny that an agreement was signed. It is unclear at this point whether Plaintiffs actually signed the Client Service Agreement.
GHS explained that as part of the debt settlement program, Plaintiffs would need to open an account at Rocky Mountain through Global. Rocky Mountain is a bank under the laws of Colorado, with its principal place of business in Florence, Colorado. Global is an Oklahoma LLC with its principal offices in Tulsa, Oklahoma. Plaintiffs signed the Special Purpose Account Application with Global and Rocky Mountain on April 7, 2009, giving Global the authority to transfer funds collected from Plaintiffs’ personal account at U.S. Bank into an account at Rocky Mountain. After depositing Plaintiffs’ funds into the Rocky Mountain account, Global would then distribute the money among Plaintiffs’ creditors. Global also pays fees to GHS from the Rocky Mountain account. From April 2009-March 2010, transfers were made into the Rocky Mountain account, and Global mailed Plaintiffs paper statements listing the transfers. During that time, GHS accepted fees in the amount of $3,523.32 from Plaintiffs, and nothing was paid to
Plaintiffs’ creditors.In May 2010, Plaintiffs brought an action against GHS, Rocky Mountain and Global, citing violations of Kentucky’s Debt Adjusting statute, its Consumer Protection statute, and charging civil conspiracy. GHS filed a motion to compel arbitration and Rocky Mountain and Global filed a joint motion to compel arbitration. – Source
What is clear from this case is that all members of the debt relief food chain need to be aware of the mutual risks and liabilities that may arise when individual vendors provide part of the total solution for the consumer.
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I am completely disgusted with GHS.
They lure you in with promises and then fail to deliver. I
followed their instructions to the letter and got nowhere. I
received a subpoena for court after they failed to communicate with
one of my creditors and upon calling, I was told the legal department
would respond and handle the response to the court for me. I
was very skeptical as they had not taken care of their job to that
point so I called on day 15 of the 20 I had to reply to the court and
low and behold; nothing had happened. I then took swift action as I
was scared to death and negotiated a settlement of 40% on my own and
within 5 days I was paid off on my major creditor. After
negotiating my own settlement for one of my two accounts, I then
turned my attention to my remaining debt. GHS transferred with
my consent an additional sum which they were certain was enough to
pay my remaining creditor. I was told they would be settled
within 10 days. Now here I am one full month later, 25 phone
calls, 10 disconnects (that’s what they say), and 2 hang ups by
supervisor (Jason, who is located in Costa Rica along with their call
center) with nothing. The phone reps can only assure me they
are working on it and give me grief over demanding a supervisor.
After speaking with a supervisor he tells me the collection agency
was let go by my creditor and a new third party was not yet
assigned. I asked why nobody else could tell me that as I spoke
with 6 people since the debt recall had taken place. Of course
Jason had no answer for my question and let me know all the reps are
very well trained. I asked Jason to own my issue since they
have the money to settle and could get rid of me forever, however
Jason refused to do so as this would make him too busy. His
exact words were, “imagine if all our clients asked me to do
this.” What a joke! 25 calls and nobody wants
to get this settled and done; then I realized I’m coming up on
another monthly payment due. In order to avoid another payment,
I called my credit card myself to negotiate as I knew they would
certainly do whatever they could to get their money. I was
promptly transferred to another area which ended up being the new
debt collector. Here is where it gets really good! The
new debt collector (ESA Processing) is actually a larger portion of
the company which owns GHS! The debt which was to be settled
was being managed in house with GHS!!! The kicker to all of
this is the merger of GHS took place in August 2011 and here we are
in November and GHS people (again in Costa Rica) had no idea!
How could they even begin to help if they don’t even realize their
parent company owns the debt! So after talking with ESA, I was
ensured my account would be settled in 24 hours. I immediately
received and offer via email and I called GHS back as the ESA rep
stated I had to work through them. After 2 more phone cutoffs,
I finally get a rep and state I have an offer and I would like to
accept the settlement and have them paid within 4 days. The
offer was $189.95 more than what I had saved with GHS, which the rep
was quick to let me know about. After confirming (for the
second time as I let her know immediately upon answering) I wanted to
have her draft the money out of my account and pay the creditor; I
was placed on hold. Guess who answered? Jason, my
supervisor who hung up on me just an hour earlier. I managed to
do in 1 hour what they couldn’t do in a month. Jason informed
me I didn’t have enough money and so for the 3rd time I once again
explained what needed to happen (funny when I transferred a lump sum
of 1000.00, I had no trouble). Jason asked to record the
conversation, which is standard and I agreed. Jason agreed to
take money from my account (his math was 60.00 off to the low side so
we still wouldn’t be able to settle) and then they would settle by
November 18 (which is the day after another payment would be drafted
from me!). I let Jason know first his math was wrong and second
the account needs to be settled in 4 days (in order to have enough
time to cancel my direct draft they would take, which would leave me
fighting them for 300.00 later). Jason got an immediate
attitude and said he would take the money and process the payment.
When I asked how much he was going to be drafted since his math was
wrong I was given the response of, “Why don’t you tell me!”.
As you can imagine, I was shocked as a company was going to take
money and couldn’t / wouldn’t tell me how much. After demanding
to know how much would be taken Jason told me he could do the math
and then hung up on me! I know from experience by the
previously mentioned draft of 1000.00, 24 hours could not happen as
the promise of my money being taken in 24 hours is incorrect because
it takes 48 hours to process (apparently he didn’t know or didn’t
care as he assured me the money would be gone). So now I will
have to follow up with 3 or 4 calls tomorrow to confirm amount and
date for withdraw and when my settlement will be mailed. So to
sum this up; I’ve paid GHS over 1000.00 in fees and they’ve done
absolutely nothing! I almost went to court, I settled both
debts myself (for the same % as they promise, and I may lose a very
good job opportunity as I have this lingering debt which should be
gone as of 2 weeks ago. To say I’m very unhappy is a severe
understatement and I am now know all they desire is to get rich off
of hurting people. The underlying question is why are we
calling Costa Rica when Americans need jobs, but again we know it’s
all about the mighty dollar!
they are located in Heredia Costa Rica
GHS has moved to Costa Rica they are no longer in Florida
Bobby V
I’d heard that rumor. Do you know which city in Costa Rica?
In Heredia Costa Rica my friend
Do you know if their intention is to try to sell back into the U.S. from Costa Rica?