For the sake of disclosure, everything below is what is alleged in the lawsuit against Legal Helpers Debt Resolution, also known as Macey, Aleman, Hyslip & Searns.
The suit kicks attorney model debt settlement and says it is no better than service delivered by a non-law-firm debt settlement provider.
LHDR rarely, if ever, negotiates settlements with all of consumer’s creditors.
Sincerely,
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.
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.
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The lawsuit was filed today, March 2, 2011 by the State of Illinois against Legal Helpers Debt Resolution (LHDC).
The full complaint can be read here.
The Highlights
- State of Illinois states LHDR has “engaged in acts or practices that violate illinois law since at least March 2009.
- LHDR “contracts out virtually all debt relief services to a third party operated and staffed by non-lawyers.”
- State does not give LHDR a pass on fees and states they violate the Illinois Debt Settlement Consumer Protection Act.
- LHDR “lures consumers through multiple marketing methods and claims its services, via a law firm, are superior to other debt settlement services.
- LHDR makes numerous claims that a law firm will be handling consumers’ debt resolution but that is not true.
- Mailers for the U.S. National Debt Relief Plan led consumers to LHDR.
- The mailers offered to settle debt by 50% or more.
- “Consumers that respond to LHDR’s website or other lead generating ads, ultimately find themselves speaking with a sales person recruited by LHDR to enroll consumers into a debt settlement program.”
- LHDR rans Sales Executive ads like the one below.
- “LHDR tells consumers that with a law firm, not only are the debts negotiated for less than they owe, but they will have the support of a national law firm governed by the American Bar Association. (The American Bar Association does not regulate attorneys in Illinois. In fact, attorneys in Illinois are regulated by the Attorney Registration and Disciplinary Commissions of the Supreme Court of Illinois and analogous entities in other states.)”
- LDHR charged a retainer of $500, a monthly fee of $49, and 15% of the total debt.
- If LHDR “is able to obtain a 65% or greater reduction of consumer’s scheduled debt, consumers agree to pay LHDR 5% of the savings based on enrolled debt.”
- Once the consumer signs the agreement with LHDR, all debt resolution services are provided by a third party.
- LHDR has entered into servicing agreements with Nationwide Support Services and Eclipse Financial Services, as an example.
- Consumers report they have no contact with a lawyer after enrolling.
- The 15% of the enrolled debt is paid to a third party.
- First three months payments goes to fees plus a portion of the next 12-18 months payments.
- “This advance fee structure makes it difficult for consumers to save funds for anticipated settlement offers.”
- Consumers are directed to NoteWorld or Global Client Solutions for escrow accounts.
- Negotiations with creditors does not begin for some time, “which is at least two to three months.”
- LHDR rarely, if ever, negotiates settlements with all consumer’s creditors.
- Participating in the program “does little to abate or prevent calls from creditors.”
- In numerous instances consumer’s are sued “by one or more of their creditors or by one or more debt collection agencies.”
- Many consumers drop out of the program “after they have paid most or all of their fees to defendant, but before defendant, or more accurately, the third parties they have agreements with, performs any debt settlement or debt mediation services.”
- Some consumers experience a “substantial increase in their debt.”
- “Consumer who have entered into agreements with LHDR state they have never spoke to or met with an attorney.”
Illinois is Asking for $$
The State of Illinois is asking for the following in the suit:
- A penalty of $10,000 per violation of the Consumer Fraud Act for people 65 or older.
- A civil penalty of $50,000 per violation of the Deceptive Trade Practices Act.
- An additional $10,000 per violation of the Deceptive Trade Practices Act for people 65 or older.
- LHDR to pay for all costs of investigation and prosecution.
- Permanently enjoining LHDR from engaging in deceptive and unfair practices.
- “Declaring all contracts entered into between the defendant and Illinois consumers by the use of methods and practices declared unlawful and rescinded and requiring full restitution by made.”
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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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llinois Attorney General Lisa Madigan and the Illinois Department of Financial and Professional Regulation Monday announced a settlement with a Chicago-based law firm that operated nationwide over allegations that it unlawfully charged consumers upfront fees to provide debt settlement services with promises to make them debt free. The settlement with Legal Helpers Debt Resolution LLC will provide $2.1 million inrestitution for Illinois residents.
http://www.insidearm.com/daily/collection-laws-regulations/collection-laws-and-regulations/state-reaches-2-1-million-settlement-with-debt-relief-firm/
Legal Helpers isued a refund to me for 300.00 and I paid almost 3,ooo.oo. Is there anything I can do to get the money back I paid to them?
What state do you live in?
Legal Helpers strikes again. I second Steve’s request. Depending on your state, you may be able to find a consumer advocate attorney who can go after them if they don’t offer a more reasonable refund. Of course if you ask me, my opinion is that Legal Helpers should give consumers a full refund at minimum.
I wouldn’t be happy with a 10% refund though, that is for sure. What did they do to earn the 2700 they are keeping? The sales outfit got most of it.
Legal Helpers Debt Resolution, aka The Law Office of Macey, Aleman, Hyslip and Searns aka many many many more alias’s. I live in Colorado, Hired them to modify my mortgage in January 2011, it is now January 2012 and we are having to foreclose on our home, we are trying to short sell it but thanks to them I will no longer have a home and have to rent an apartment not to mention the $2,100.00 they stole from me and never refunded. I would like to know how to join a class action suit or what legal help is available. Curriently the Colorado Attorney General’s office has investigated and now the Supreme Court Justice of Denver Colorado are investigating their “licenses” but that’s all no refund just scammed, broke, lost home and depressed. I hope they are happy!
I can’t believe I became a victim of this company’s lies & fraudulent tactics in August 2010…I just sent an email to the New Jersey State Attorney General’s Office to consider filing a class action suit against them and hopefully get at least some of my money back.
I can’t believe I became a victim of this company’s lies & fraudulent tactics in August 2010…I just sent an email to the New Jersey State Attorney General’s Office to consider filing a class action suit against them and hopefully get at least some of my money back.
When I was growing up, I was taught “two wrongs don’t make a right”
So regardless of the AG’s perceived motivations, and regardless of what banks do or do not do. Legal helpers is not doing a good thing for consumers. So trying to cover up or justify bad behavior by pointing to other perceived bad behavior doesn’t fly.
Regardless of whether or not what you say is true. Legal Helpers choses to put their own pockets and those of their sales affiliates not only in front of their clients needs but also to the detriment of their clients.
The facts of the suit are 100% inline with the consumer feedback I have received over the years.
Wow finally someone that knows the truth. The AG Lisa Madigan doesnt care about any consumer but to make sure that the banks continue to get richer and to maintain a position and make sure that her Father keeps the contract with the banks. people please this banks DONT care, I have seen Chase, Citibank and many more suing Senior Citizen and garnishing there bank account where their social security is the only source of fund been deposit. They are coldblooded and us politician who they sponsor to pull this kind of stunt by people like Lisa Madigan. The AG should dig deeper against banks not against company that knows what banks are doing and trying to stop them from continuing destroying peoples life.
I worked for LHDR also that place is no joke, they want to put as many people on the plan as possible. I hope that place goes down. The new fee structure is even worse and takes more of the clients money.
As a former employee of LHDR, I knew this was coming. LHDR has actually been around since December of 2008 (not March 2009 as the complaint indicates). I saw all these low-level employees doing debt settlement without any attorneys around. LHDR didn’t even hire an attorney until mid-2010 in its Chicago office (guy named Kelly Seibert) -the company was doing hundreds of debt settlement cases without a attorneys on the back-end. It was simply farming this stuff out to 3rd party, sketchy debt-settlement firms.
Once in a blue moon, Thomas Macey would come rolling in after a 2 day cocaine bender and scream at people. Then he would climb back in his Maserati and tear down Wacker Drive. It was like something out of the movie “The Boiler Room.”
As a former employee of LHDR, I knew this was coming. LHDR has actually been around since December of 2008 (not March 2009 as the complaint indicates). I saw all these low-level employees doing debt settlement without any attorneys around. LHDR didn’t even hire an attorney until mid-2010 in its Chicago office (guy named Kelly Seibert) -the company was doing hundreds of debt settlement cases without a attorneys on the back-end. It was simply farming this stuff out to 3rd party, sketchy debt-settlement firms.
Once in a blue moon, Thomas Macey would come rolling in after a 2 day cocaine bender and scream at people. Then he would climb back in his Maserati and tear down Wacker Drive. It was like something out of the movie “The Boiler Room.”
I worked for LHDR also that place is no joke, they want to put as many people on the plan as possible. I hope that place goes down. The new fee structure is even worse and takes more of the clients money.
What no one is talking about is the State AG of Illinois Lisa Madigan’s father is a politician who has accepted major constructions from the major banks over the years. Basically, this is all politics and intimidation tactics by the banking industry to scare potential consumers. This suit is just another form of negotiation. Steve, you should do a story on Mrs Madigan and he special interest buddies. She is not in any way a consumer advocate, she is a politician.
What no one is talking about is the State AG of Illinois Lisa Madigan’s father is a politician who has accepted major constructions from the major banks over the years. Basically, this is all politics and intimidation tactics by the banking industry to scare potential consumers. This suit is just another form of negotiation. Steve, you should do a story on Mrs Madigan and he special interest buddies. She is not in any way a consumer advocate, she is a politician.
Wow finally someone that knows the truth. The AG Lisa Madigan doesnt care about any consumer but to make sure that the banks continue to get richer and to maintain a position and make sure that her Father keeps the contract with the banks. people please this banks DONT care, I have seen Chase, Citibank and many more suing Senior Citizen and garnishing there bank account where their social security is the only source of fund been deposit. They are coldblooded and us politician who they sponsor to pull this kind of stunt by people like Lisa Madigan. The AG should dig deeper against banks not against company that knows what banks are doing and trying to stop them from continuing destroying peoples life.
When I was growing up, I was taught “two wrongs don’t make a right”
So regardless of the AG’s perceived motivations, and regardless of what banks do or do not do. Legal helpers is not doing a good thing for consumers. So trying to cover up or justify bad behavior by pointing to other perceived bad behavior doesn’t fly.
Regardless of whether or not what you say is true. Legal Helpers choses to put their own pockets and those of their sales affiliates not only in front of their clients needs but also to the detriment of their clients.
The facts of the suit are 100% inline with the consumer feedback I have received over the years.
The US National Debt Relief Plan…. Really?
Na, Na, Na, Na… Na, Na, Na, Na… Hey, Hey, Hey, Goodbye………
This will be interesting.
Na, Na, Na, Na… Na, Na, Na, Na… Hey, Hey, Hey, Goodbye………
This will be interesting.
The US National Debt Relief Plan…. Really?
I actually thought of it this way, knowing what I know if I was the consumer I would at least consider a small fee to have representation.
But, I think companies can offer attorney negotiations (without representation) and still get similar results for the very rare, but aggressive creditors that only want to deal with attorney. I’m going to throw a guess and say maybe 1/10 would ever benefit from at least 1 account having Attorney Letterhead or an attorney’s voice for negotiations.
very rare, but it can help.
Alex,
You think now all of us playing by the rules and not collecting up front fees can get a break on lead cost? 😉
I will say, besides the BIG players like Freedom, there are quite a few LHDR companies that advertise and are making it difficult to get an affordable marketing cost.
I’ve seen a few companies, like this Covenant Debt solutions that Steve posted about the other day… they charge $700 for a retainer fee and then everything else is performanced based… I secret shipped them and the way they are getting around it is the attorney is paid directly for representation.. so its “not for settling debt” but for representation.
Not sure how I feel about it. I mean, if your going to pay up front for an attorney to represent you, I feel it is acceptable because it happens all the time. You pay lawyers in advance of services in the form of a retainer. My grip is, its in connection with the debt settlement and I think making it part of the TSR.
Hi Steve,
I know this is a tough pill for most LHDR reps to swallow but here it comes. I assume this will take months to get it all sorted out but it certainly should open the eyes of some people that the need to operate within the TSR rule means no up-front fees, not sometimes is you are an attorney or in certain cases if, what when, etc.
The TSR rule is pretty clear and although it may take the FTC longer to take action, state AG’s will start filing these with more frequency.
Thanks for keeping the posts coming.
Alex Viecco
Hi Steve,
I know this is a tough pill for most LHDR reps to swallow but here it comes. I assume this will take months to get it all sorted out but it certainly should open the eyes of some people that the need to operate within the TSR rule means no up-front fees, not sometimes is you are an attorney or in certain cases if, what when, etc.
The TSR rule is pretty clear and although it may take the FTC longer to take action, state AG’s will start filing these with more frequency.
Thanks for keeping the posts coming.
Alex Viecco
Alex,
You think now all of us playing by the rules and not collecting up front fees can get a break on lead cost? 😉
I will say, besides the BIG players like Freedom, there are quite a few LHDR companies that advertise and are making it difficult to get an affordable marketing cost.
I’ve seen a few companies, like this Covenant Debt solutions that Steve posted about the other day… they charge $700 for a retainer fee and then everything else is performanced based… I secret shipped them and the way they are getting around it is the attorney is paid directly for representation.. so its “not for settling debt” but for representation.
Not sure how I feel about it. I mean, if your going to pay up front for an attorney to represent you, I feel it is acceptable because it happens all the time. You pay lawyers in advance of services in the form of a retainer. My grip is, its in connection with the debt settlement and I think making it part of the TSR.
I actually thought of it this way, knowing what I know if I was the consumer I would at least consider a small fee to have representation.
But, I think companies can offer attorney negotiations (without representation) and still get similar results for the very rare, but aggressive creditors that only want to deal with attorney. I’m going to throw a guess and say maybe 1/10 would ever benefit from at least 1 account having Attorney Letterhead or an attorney’s voice for negotiations.
very rare, but it can help.