For some it was only a matter of time before a regulator took a swipe at the attorney model debt settlement approach. Well today the mystery was solved of who it would be. Attorney General Lisa Madigan, a hero of many for standing up for consumers, answered the call and filed suit today against Legal Helpers Debt Resolution, headquartered out of Chicago.
The attorney model of debt settlement has been nothing more than a charade designed to meet the obligations set forth as exemptions of the advanced fee restrictions for debt settlement services.
With the advent of the FTC’s passing of telemarketing sales rules in 2010 that limited up-front or advanced fees, many flocked towards attorney model solutions that were heralded as safe havens to continue front loaded fees for debt settlement services. Frankly it has been an affront against the intended protections put in place to help people with money troubles.
For about half a year now people inside the debt relief industry have wondered when regulators would take action against the pseudo free pass that gave lawyers the comfort to feel that attorney model debt settlement was going to be the golden egg they prayed it would be.
My prediction is this will not be the only case against attorney model firms. Madigan has a good track record of achieving results and with her case she’s also laid out the challenge that attorney model debt settlement, when delivered via affiliate marketers and backend third-party servicer providers, stinks and leaves the attorney exposed and is not exempt from regulation.
The headline in the Chicago Tribune story today about the Legal Helpers Debt Resolution suit read:
“Suit: Lawyers were ‘front’ for debt-settlement service”
Under the Illinois Debt Settlement Consumer Protection Act attorneys were exempted from the regulation and apparently felt they could boldly do whatever they wanted for profit even if it was not good for consumers.
The Illinois Debt Settlement Consumer Protection Act says a debt settlement provider does not include attorneys licensed, or otherwise authorized, to practice in Illinois who are engaged in the practice of law. – Source
But after reading the State of Illinois lawsuit against Legal Helpers Debt Resolution, that “free pass” was laughed at and ignored as it should have been with operations that deliver services without measurable benefit for consumers.
The suit against Legal Helpers Debt Resolution alleges consumers laid out large amounts of non-refundable fees and the services were collectively ineffective. In fact the suit says the attorney firm “rarely, if ever, negotiates settlements with all of consumer’s creditors.”
Legal Helpers Debt Resolution isn’t the only enterprise attempting to drive freight trains through loopholes designed for small operators. But Legal Helpers Debt Resolution is by far the largest enterprise to so blatantly embrace so many non-lawyer entities to try and pull off this ruse.
By bringing this lawsuit Attorney General Madigan and her staff have made it very clear that harming consumers under the guise of delivering legal services in order to find a loophole in the law, is not going to fly.
This suit by Madigan has been whispered about the various state and federal regulators. They knew it was coming. And if the other regulators are going to take similar aim against attorney model debt settlement providers then this case against Legal Helpers Debt Resolution and Attorney General Madigan will help pave the way.
This case may have been filed in Illinois but the arguments the case makes could be made on a federal level as well. If the attorney exemption isn’t going to fly with the courts in Illinois it’s not going to pass muster when reaching for the exemption under the rules put forth by the Federal Trade Commission. All regulators need is a precedent and outline to follow and this case may just give them exactly what they are looking for. It’s the primer.
The Chicago Tribune reported quotes from Jason Searns, general counsel and managing partner with Legal Helpers, who said his firm has done nothing wrong and is providing an alternative for clients who don’t want to declare bankruptcy.
“We’re a bona fide law firm providing legal services,” he said. “Our attorneys review every client’s file to determine what’s appropriate for them.”
Searns said Legal Helpers has a different business model than firms that “rent a lawyer” so they can take advantage of the upfront-fee exemption. His firm provides legal counsel to clients and has a “strategic alliance” with debt-settlement firms to provide debt-management services.
“It’s all under our supervision and our auditing control,” Searns said. “When the facts come out, it will show we’re perfectly fine in what we’re doing with our clients.” – Source
All attorney firms should watch the suit carefully. While it may have the Legal Helpers Debt Resolution name on it it’s aim is to strike at all attorney model firms that are setup to skirt the law designed to protect consumers.
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.
Do you have a question you'd like to ask me for free? Go ahead and click here.
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.
You can always hunt down a local attorney to discuss your options. You may also want to begin the refund process, here.
I was with Stratton & Feinstein which was working well for me when Legal Helpers took over. For six months of phone calls and e-mails in desperation to get my credit back on track this company totally ignored me. When I did get a phone call back they said it’s a new law with the bank holding up my accounts . I callled the agency that was taking out the payments and they said it was legal helpers that put me on hold not them. I am so sick over this my blood pressure has gone up and I’m so stressed I’m sick almost every day now. I don’t know who to trust any more and am seeking legal help to go after them.
I was with Stratton & Feinstein which was working well for me when Legal Helpers took over. For six months of phone calls and e-mails in desperation to get my credit back on track this company totally ignored me. When I did get a phone call back they said it’s a new law with the bank holding up my accounts . I callled the agency that was taking out the payments and they said it was legal helpers that put me on hold not them. I am so sick over this my blood pressure has gone up and I’m so stressed I’m sick almost every day now. I don’t know who to trust any more and am seeking legal help to go after them.
You can always hunt down a local attorney to discuss your options. You may also want to begin the refund process, here.
Steve,
While I find your site very informative and your research is usually tip top, I do have one observation on your take. LDHR was and never will be a true attorney model. Most of us in the industry saw them for what they are a long time ago. They were simply “renting” their name out and providing the “face to face” required to bypass FTC Final rule. This allowed debt settlement companies to masquerade as an attorney model when they never were. True attorney models, such as where I work, is a good to BK or CCCS. My firm for example has never charged any upfront fees. We have always been performance based. Trued attorney models are Law Firms first and foremost. They will file responses and appear in court when necessary. This lawsuit will not hurt the true attorney models at all. It will however serve as a warning to all the debt settlement companies trying to side step the law under false attorney model guise. I for one am encouraged by this suit and predicted LDHR would have a huge target on them from the get go. I hope their demise is swift so that the others will stop deceiving the public.
Steve,
While I find your site very informative and your research is usually tip top, I do have one observation on your take. LDHR was and never will be a true attorney model. Most of us in the industry saw them for what they are a long time ago. They were simply “renting” their name out and providing the “face to face” required to bypass FTC Final rule. This allowed debt settlement companies to masquerade as an attorney model when they never were. True attorney models, such as where I work, is a good to BK or CCCS. My firm for example has never charged any upfront fees. We have always been performance based. Trued attorney models are Law Firms first and foremost. They will file responses and appear in court when necessary. This lawsuit will not hurt the true attorney models at all. It will however serve as a warning to all the debt settlement companies trying to side step the law under false attorney model guise. I for one am encouraged by this suit and predicted LDHR would have a huge target on them from the get go. I hope their demise is swift so that the others will stop deceiving the public.
I never said I don’t make money. What I’ve told you before is that I address all of this in the site terms.
lol have the stuff you report isnt right Steve you are a scam because u say you dont make money on this website but thats a lie and anyone that comes to you I prey for them…
Don’t worry, I’ll report on the case either way.
Back the bus up. How does my reporting on a lawsuit filed by the Illinois Attorney General and this article make me a scam?
Ymsal is claiming he is a client of LHDR and havent paid a fee? It’s because LHDR don’t charge their own employee to enroll into the debt settlement program.
yea sure 28% and they are charging you upfront lol sure who are you anyways… why dont you call the chicago office and get some info and not nationwide dummy and i refer clients to them on a daily basis
I know many of their affiliates- Besides Jordan at Nationwide Marketing has sent me ALL of their sales material- Steve has it too. But you finished your program with them a year ago, right? So you obviously would know what theyre selling today? Of course i could quote you here from a post of yours above “am one of the client that signed up after 10-27-10 just for your info….”
I took a client from LHDR last week. TThey are charging MULTIPLE fees up front & fees on the back- All in all, about 28% of a client’s debt.
Keep posting dumbass
Please!!! If any one is still reading anything YMSAL posts, remember to take it with a less than a grain of salt as he has proven himself to be either a liar,someone who is heavily medicated, or both.
Alleged no Proof and i can promise you that and once it comes out i will come back to this website and come out everyone that said it was going on. Then ill send a message to steve and request a full article to be written on how LHDR is still in business
LOL was the fee structure that was provided an old one lol just because someone posted it at a later time doesnt mean the company uses it still. Alos i will not provide any docs to steve he is a scam artist
Please if there is any clients that read this and you are with lhdr as of after 10-27-11 please tell us if you paid a fee…..
I am still waiting to see how you figure clients pay a fee upfront… where do you get your info
Ymsal – You are now a troll who cannot keep their story straight. Earlier in this thread you said you are a client who enrolled after 10/27/10. Now you say you completed the program a year ago. Your words have absolutely no credibility to anyone reading this thread. None whatsoever.
I strongly suggest you go get another screen name and come back and try again. I will point out in advance that you are wasting your time if you choose to do so. Most anyone reading this and other information will know the jig is likely up for this and probably many other firms.
Why cant you accept that and move on?
If you are a marketer for this service, as some others have suggested, is there not some other “in name only” firm you can go hype for a while?
Ymsal – The allegations laid out by the Attorney General in the IL suit do not support your assertion. The efforts made by affiliates involved with LHDR suggest upfront fees are charged. Affiliate commission structures that have been published after 10/27/10 show up front fees.
Are you certain you signed up with “Legal Helpers Debt Resolution” and are being serviced by “Nationwide” or “Eclipse”?
You are posting a contradiction to what has elsewhere been established as common knowledge. If you are serious about wanting to set the record straight, please do as I suggested above where I said:
“could you please outline the enrollment process you went through from start to finish in reply to this comment? Could you be persuaded to redact personal identifiers from your enrollment and client paperwork and upload that material to Steve on this fine site anonymously?”
To continue to comment with “LHDR does not charge a fee prior to settlement” can not be taken seriously by anyone unless you are willing to back up the claim. If you do continue without some type of substantiation, you will come off as what the internet refers to as a “troll”. I am not calling you one, at least not yet.
Steve gets paid trust me he gets paid well… do you think steve spends hours because he loves doing this. You guys are like sheep
exactly you dont pay until you pay the settlement amount… I really think you guys think every company out there is bad… please tell me one company you guys like other then the one you tell people to talk to.
I completed a year ago and have been sending people since
I refer plenty of people because of what a great job they did for me… my sister is in the program and has not paid up untill last month when they got her settlement. You guys think you know what you are talking about but you really dont. So lets see if you hear about anything else in the next couple of months. They wont even have any real vidence to go to trail.
I may be wrong in my assumption, but it seems to me that your income might be predicated on the existence of LHDR or a company like it. Every point you tried to make is just well, bogus. But thanks for sharing your thoughts.
please tell me what ive said that was bogus… everything i read on her is bogus. Its funny that you guys believe what you hear and dont take the facts. Please find any consumer that signed up after 10-27-11 that paid upfront fee.
Targeting the elderly has an additional 10k penalty in IL apparently.
The more I have read into the surrounding issues, the more I am forming the opinion that most companies operating, supporting, marketing and advertising the “in name only” business model are the walking dead. To put that more clearly, they are one challenge away from closing up shop and bankrupting to escape civil damages or awards.
If settlement is reached as an alternative to trial I should hope it will include some of the veterans mentioned above, who concocted all of these “cute” plans, be required to exit the space entirely and not be aloud to return. There is precedent for this being done.
I am just casually interested in these matters. I am of medium intellect. If I can poke holes in much of what is being done in this market place, I am confident the cops on the beat have matters well in hand. Regulators do tend to move slow, but that movement does have somewhat of a grinding effect on objects standing on their path.
No shock that the Ymsal the LHDR affiliate (not client) lying about LHDR fee structure has not popped back up. Im certain that most of us have spoken to Nationwide Support in their effort to recruit us as affiliates. We told him to go pound sand!. Of course they claimed they were “compliant because they met the u front fee ban exclusion in claiming they arranged “face to face” meetings- Even told me, “If theyre elderly or disabled we can send a currier to their home!”- Elderly? Really?
Ymsal,
Prior to being able to respond to this, and your other comments, in the way I believe you are requesting, I think it important to be sure we are working from the same understandings and definitions.
Your comment about clients of LHDR don’t pay (which you have identified yourself as one) unless a settlement comes through, would be casually read as your not remitting a dime in any way whatsoever unless you get a debt settled. This would define no upfront fee to me.
Is this also how you define “no upfront fee”?
Please excuse my skepticism, but could you please outline the enrollment process you went through from start to finish in reply to this comment? Could you be persuaded to redact personal identifiers from your enrollment and client paperwork and upload that material to Steve on this fine site anonymously?
You are making assertions that are not consistent with information available on this and other sites.
Ymsal,
Who said anything about letting all the companies go under? I say let the 95% or so that totally suck, go out of the business. Let the few that put their clients first stay around and help consumers.
To your point about a consumer can’t do it on their own, I would have to disagree with you. With a little knowledge a consumer can settle their own debts. Sometimes a consumer would prefer to hire a company, sometimes not, but both options are viable. Who fights with a rep for hours to get a settlement?
Why do you assume the client would have no knowledge of what a specific company will settle for? The information is out there if a consumer took the time to do the research.
I may be wrong in my assumption, but it seems to me that your income might be predicated on the existence of LHDR or a company like it. Every point you tried to make is just well, bogus. But thanks for sharing your thoughts.
Too easy…. Really?
So, youre a current client of LHDR?
IF ALL THESE COMPANY’S GO UNDER WHO WILL HELP US… DO U THINK PEOPLE CAN DO IT ON THERE OWN. NO THEY CANT AND DO YOU KNOW WHY ITS BECAUSE THE COLLECTIONS AGENCY KNOWS THAT THE CLIENT OR CONSUMER HAS NO KNOWLEDGE ON WHAT CAN BE APPROVED BECAUSE THEY HAVE NEVER SEEN A SETTLEMENT WITH THAT COMPANY BEFORE. ALSO WHAT CLIENT HAS TIME TO SIT ON THE PHONE AND FIGHT WITH A REP FOR HOURS. ALSO DO YOU THINK THESE LAWS ARE IN PLACE TO HELP CLIENTS MAYBE BUT WHO MADE THESE LAWS POSSIBLE ARE THE BIG BANKS WONDER WHY IS BECAUSE I WOULD SAY 65% PEOPLE DONT KNOW THERE RIGHTS AND THEY WANT TO KEEP IT THAT WAY. ITS FUNNY THAT AMERICAN EXPRESS DID NOT WANT TO TALK TO LHDR ONLY ME BECAUSE THEY SAY THEY DONT DEAL WITH THOSE TYPES OF COMPANYS I WONDER WHY IS IT BECAUSE THEY KNOW AMERICAN EXPRESS CAN APPROVE A GREAT SETTLEMENT AND THEY WANTED 65% OUT OF ME. I LET LHDR KNOW AND THEY GOT ME THE 25% OFFER EVEN AFTER THEY SAID THEY DONT DEAL WITH THEM.
IF ALL THESE COMPANY’S GO UNDER WHO WILL HELP US… DO U THINK PEOPLE CAN DO IT ON THERE OWN. NO THEY CANT AND DO YOU KNOW WHY ITS BECAUSE THE COLLECTIONS AGENCY KNOWS THAT THE CLIENT OR CONSUMER HAS NO KNOWLEDGE ON WHAT CAN BE APPROVED BECAUSE THEY HAVE NEVER SEEN A SETTLEMENT WITH THAT COMPANY BEFORE. ALSO WHAT CLIENT HAS TIME TO SIT ON THE PHONE AND FIGHT WITH A REP FOR HOURS. ALSO DO YOU THINK THESE LAWS ARE IN PLACE TO HELP CLIENTS MAYBE BUT WHO MADE THESE LAWS POSSIBLE ARE THE BIG BANKS WONDER WHY IS BECAUSE I WOULD SAY 65% PEOPLE DONT KNOW THERE RIGHTS AND THEY WANT TO KEEP IT THAT WAY. ITS FUNNY THAT AMERICAN EXPRESS DID NOT WANT TO TALK TO LHDR ONLY ME BECAUSE THEY SAY THEY DONT DEAL WITH THOSE TYPES OF COMPANYS I WONDER WHY IS IT BECAUSE THEY KNOW AMERICAN EXPRESS CAN APPROVE A GREAT SETTLEMENT AND THEY WANTED 65% OUT OF ME. I LET LHDR KNOW AND THEY GOT ME THE 25% OFFER EVEN AFTER THEY SAID THEY DONT DEAL WITH THEM.
So, youre a current client of LHDR?
I completed a year ago and have been sending people since
Ymsal – You are now a troll who cannot keep their story straight. Earlier in this thread you said you are a client who enrolled after 10/27/10. Now you say you completed the program a year ago. Your words have absolutely no credibility to anyone reading this thread. None whatsoever.
I strongly suggest you go get another screen name and come back and try again. I will point out in advance that you are wasting your time if you choose to do so. Most anyone reading this and other information will know the jig is likely up for this and probably many other firms.
Why cant you accept that and move on?
If you are a marketer for this service, as some others have suggested, is there not some other “in name only” firm you can go hype for a while?
I am still waiting to see how you figure clients pay a fee upfront… where do you get your info
Ymsal,
Who said anything about letting all the companies go under? I say let the 95% or so that totally suck, go out of the business. Let the few that put their clients first stay around and help consumers.
To your point about a consumer can’t do it on their own, I would have to disagree with you. With a little knowledge a consumer can settle their own debts. Sometimes a consumer would prefer to hire a company, sometimes not, but both options are viable. Who fights with a rep for hours to get a settlement?
Why do you assume the client would have no knowledge of what a specific company will settle for? The information is out there if a consumer took the time to do the research.
I may be wrong in my assumption, but it seems to me that your income might be predicated on the existence of LHDR or a company like it. Every point you tried to make is just well, bogus. But thanks for sharing your thoughts.
No shock that the Ymsal the LHDR affiliate (not client) lying about LHDR fee structure has not popped back up. Im certain that most of us have spoken to Nationwide Support in their effort to recruit us as affiliates. We told him to go pound sand!. Of course they claimed they were “compliant because they met the u front fee ban exclusion in claiming they arranged “face to face” meetings- Even told me, “If theyre elderly or disabled we can send a currier to their home!”- Elderly? Really?
Targeting the elderly has an additional 10k penalty in IL apparently.
The more I have read into the surrounding issues, the more I am forming the opinion that most companies operating, supporting, marketing and advertising the “in name only” business model are the walking dead. To put that more clearly, they are one challenge away from closing up shop and bankrupting to escape civil damages or awards.
If settlement is reached as an alternative to trial I should hope it will include some of the veterans mentioned above, who concocted all of these “cute” plans, be required to exit the space entirely and not be aloud to return. There is precedent for this being done.
I am just casually interested in these matters. I am of medium intellect. If I can poke holes in much of what is being done in this market place, I am confident the cops on the beat have matters well in hand. Regulators do tend to move slow, but that movement does have somewhat of a grinding effect on objects standing on their path.
I refer plenty of people because of what a great job they did for me… my sister is in the program and has not paid up untill last month when they got her settlement. You guys think you know what you are talking about but you really dont. So lets see if you hear about anything else in the next couple of months. They wont even have any real vidence to go to trail.
I may be wrong in my assumption, but it seems to me that your income might be predicated on the existence of LHDR or a company like it. Every point you tried to make is just well, bogus. But thanks for sharing your thoughts.
please tell me what ive said that was bogus… everything i read on her is bogus. Its funny that you guys believe what you hear and dont take the facts. Please find any consumer that signed up after 10-27-11 that paid upfront fee.
I know many of their affiliates- Besides Jordan at Nationwide Marketing has sent me ALL of their sales material- Steve has it too. But you finished your program with them a year ago, right? So you obviously would know what theyre selling today? Of course i could quote you here from a post of yours above “am one of the client that signed up after 10-27-10 just for your info….”
I took a client from LHDR last week. TThey are charging MULTIPLE fees up front & fees on the back- All in all, about 28% of a client’s debt.
Keep posting dumbass
yea sure 28% and they are charging you upfront lol sure who are you anyways… why dont you call the chicago office and get some info and not nationwide dummy and i refer clients to them on a daily basis
cal. you seem to think you know alot where did u get that info because I would love to prove you wrong
am one of the client that signed up after 10-27-10 just for your info….
LOL ok we will see…. as of 10-27-10 clients dont pay unless a settlement comes through. Its funny is that you assume that you guys know. Please provide facts if you have any.
post 10/27/10 – apologies…
Many people cannot wait for the facts to come out Ymsal.
One fact that seems to have already been established and is out: LHDR clients enrolled post 10/27/11 paid what will be determined as “upfront fee’s”.
Just because fees were described to you and others as something other than upfront and you believe it does not mean that is so. Words and phrases to describe a thing can often be done in a way to obfuscate the true nature of the thing. In this case “upfront fees”.
Are you really going to come to this very serious conversation with a set of garden variety pom-poms and wave them around like a cheer leader for LHDR?
IL clients were rep in court also…. so lets see how far this goes
Do you think a company that big would not format the way they collect once the law came out… the complaints are from old clients that never saved….
Do you think a company that big would not format the way they collect once the law came out… the complaints are from old clients that never saved….
IL clients were rep in court also…. so lets see how far this goes
Many people cannot wait for the facts to come out Ymsal.
One fact that seems to have already been established and is out: LHDR clients enrolled post 10/27/11 paid what will be determined as “upfront fee’s”.
Just because fees were described to you and others as something other than upfront and you believe it does not mean that is so. Words and phrases to describe a thing can often be done in a way to obfuscate the true nature of the thing. In this case “upfront fees”.
Are you really going to come to this very serious conversation with a set of garden variety pom-poms and wave them around like a cheer leader for LHDR?
post 10/27/10 – apologies…
LOL ok we will see…. as of 10-27-10 clients dont pay unless a settlement comes through. Its funny is that you assume that you guys know. Please provide facts if you have any.
am one of the client that signed up after 10-27-10 just for your info….
Too easy…. Really?
cal. you seem to think you know alot where did u get that info because I would love to prove you wrong
Ymsal,
Prior to being able to respond to this, and your other comments, in the way I believe you are requesting, I think it important to be sure we are working from the same understandings and definitions.
Your comment about clients of LHDR don’t pay (which you have identified yourself as one) unless a settlement comes through, would be casually read as your not remitting a dime in any way whatsoever unless you get a debt settled. This would define no upfront fee to me.
Is this also how you define “no upfront fee”?
Please excuse my skepticism, but could you please outline the enrollment process you went through from start to finish in reply to this comment? Could you be persuaded to redact personal identifiers from your enrollment and client paperwork and upload that material to Steve on this fine site anonymously?
You are making assertions that are not consistent with information available on this and other sites.
exactly you dont pay until you pay the settlement amount… I really think you guys think every company out there is bad… please tell me one company you guys like other then the one you tell people to talk to.
Ymsal – The allegations laid out by the Attorney General in the IL suit do not support your assertion. The efforts made by affiliates involved with LHDR suggest upfront fees are charged. Affiliate commission structures that have been published after 10/27/10 show up front fees.
Are you certain you signed up with “Legal Helpers Debt Resolution” and are being serviced by “Nationwide” or “Eclipse”?
You are posting a contradiction to what has elsewhere been established as common knowledge. If you are serious about wanting to set the record straight, please do as I suggested above where I said:
“could you please outline the enrollment process you went through from start to finish in reply to this comment? Could you be persuaded to redact personal identifiers from your enrollment and client paperwork and upload that material to Steve on this fine site anonymously?”
To continue to comment with “LHDR does not charge a fee prior to settlement” can not be taken seriously by anyone unless you are willing to back up the claim. If you do continue without some type of substantiation, you will come off as what the internet refers to as a “troll”. I am not calling you one, at least not yet.
LOL was the fee structure that was provided an old one lol just because someone posted it at a later time doesnt mean the company uses it still. Alos i will not provide any docs to steve he is a scam artist
Please if there is any clients that read this and you are with lhdr as of after 10-27-11 please tell us if you paid a fee…..
Please!!! If any one is still reading anything YMSAL posts, remember to take it with a less than a grain of salt as he has proven himself to be either a liar,someone who is heavily medicated, or both.
Ymsal is claiming he is a client of LHDR and havent paid a fee? It’s because LHDR don’t charge their own employee to enroll into the debt settlement program.
Back the bus up. How does my reporting on a lawsuit filed by the Illinois Attorney General and this article make me a scam?
I cant wait to see what happens when the facts come out!!! Once it does come out they would of wasted so much of tax payers money to try and fight this because as of oct no client is paying upfront fee’s lol
I cant wait to see what happens when the facts come out!!! Once it does come out they would of wasted so much of tax payers money to try and fight this because as of oct no client is paying upfront fee’s lol
The $ barrier to entry will be a limiting factor, but there are fish in there for sure.
Thanks.
Excellent question about the “private right of action.” I didn’t know so I went to the FTC who said.
“There is a private right of action, but damages must exceed $50,000 to bring a private claim. Here’s the applicable provision of the Telemarketing Act:
15 USC § 6104. Actions by private persons
(a) In general
Any person adversely affected by any pattern or practice of telemarketing which violates any rule of the Commission under section 6102 of this title, or an authorized person acting on such person’s behalf, may, within 3 years after discovery of the violation, bring a civil action in an appropriate district court of the United States against a person who has engaged or is engaging in such pattern or practice of telemarketing if the amount in controversy exceeds the sum or value of $50,000 in actual damages for each person adversely affected by such telemarketing. Such an action may be brought to enjoin such telemarketing, to enforce compliance with any rule of the Commission under section 6102 of this title, to obtain damages, or to obtain such further and other relief as the court may deem appropriate.”
The time has come to run these clowns out of town. Everyone in the business knows what scumbags and theives these guys are. There are many fine attorneys out there who provide real legal services for reasonable fees. They actually return their clients’ phone calls. Think about their cases. File complete and accurate paperwork with the courts. And on and on. Legal Helpers is not representative of the consumer debtor bar, and I hope Lisa Madigan chases all of LH’s partners into Bankruptcy Court.
15 USC 6104, Actions by private persons:
Any person adversely affected by any pattern or practice of telemarketing which violates any rule of the Commission under section 6102 of this title, or an authorized person acting on such persons behalf, may, within 3 years after discovery of the violation, bring a civil action in an appropriate district court of the United States against a person who has engaged or is engaging in such pattern or practice of telemarketing if the amount in controversy exceeds the sum or value of $50,000 in actual damages for each person adversely affected by such telemarketing. Such an action may be brought to enjoin such telemarketing, to enforce compliance with any rule of the Commission under section 6102 of this title, to obtain damages, or to obtain such further and other relief as the court may deem appropriate.
The time has come to run these clowns out of town. Everyone in the business knows what scumbags and theives these guys are. There are many fine attorneys out there who provide real legal services for reasonable fees. They actually return their clients’ phone calls. Think about their cases. File complete and accurate paperwork with the courts. And on and on. Legal Helpers is not representative of the consumer debtor bar, and I hope Lisa Madigan chases all of LH’s partners into Bankruptcy Court.
I am glad you’ve notice and all this time other companies attacks Steve for releasing these type of information when Steve should be getting paid for posting these valuable information on his site.
Thank you. I see you have been waaaay ahead on these issues. I briefly scanned the links you provided. One link in particular laid out some things of interest:
# Legal Service Support Group, LLC is a Nevada corporation that is owned by three companies: Lynch Financial Solutions, JEM Group, and Century Mitigations. – Source
* Lynch Financial Solutions is a Florida corporation owned by Thomas Lynch, Jr and the officers are Maryana Gomez and Dale Weikel. – Source
* JEM Group is owned by Joanne Garneau and Arthur Garneau. JEM Group was just named in the class action suit against Legal Helpers Debt Resolution.
o The Garneau’s also own Nationwide Support Services, Inc. – Source
* Century Mitigations, LP is owned by Consumer Finance Alternatives, Inc. – Source
o Consumer Finance Alternatives is owned by Dave Leuthold and Amy Michalo is the treasurer. – Source
+ Amy Michalo is the president of Century Negotiations, Inc. – Source
# The attached spreadsheets refer to TFG receiving money as part of the added on up-sell financial coaching program. I believe TFG refers to Financial Strength Builders, see this article, which is really owned by Joanne Garneau and Arthur Garneau. – Source
The players are not “green” or newbies in the least. They appeared to be seasoned veterans. They also appear to populate and to be, or to have been, heavily involved with an industry trade group.
I am seriously of the belief that a dozen or more AG’s could file actions that mirror the one in IL with minor edits to include their own respective UDAP code sections. It would not require all that much really. It would seem to me that including some the industry veterans above as named defendants would provide a bountiful harvest.
I am somewhat familiar with the recent amendments to the TSR. Does it provide for private right of action? I ask only because the consumer bar may have their own angle to explore with this. If so, perhaps litigation risk and cost estimates have been grossly underestimated by many.
FYI, previous articles on Nationwide Support Services that may help to fill in some of the gaps.
Here is one past reader question from a debt settlement employee that mentioned LHDR and Eclipse.
Any comment from Mr. Crockson?
If providing legitimate legal services consistent with all applicable state and federal rules and laws in each and every jurisdiction, probably.
That is not what is happening in the instant case.
The advertised service is being promoted and performed by non attorneys. These non attorneys benefit the most financially. This appears to be an “attorney in name only” thing which Searns openly refutes in the Tribune article, but that appears to be an accurate description.
The team with the IL AG also raise violations of law not associated with the Debt Settlement Consumer Protection Act. That was wise. The case will not hinge on DSCPA alone.
AG’s nationwide (again – no pun intended) could similarly bring actions that rely upon their individual tests for Unfair & Deceptive Acts as the primary focus, or supplemental to, each case. Each case from its outset need only survive early motion practice so that discovery requests can begin to be fulfilled. My guess is it would be Game Over a short time later.
I know there has been ample coverage of LHDR here and elsewhere, but who are Eclipse and Nationwide? Who runs those outfits? What assumptions did management at these companies make that led to this being grown out? Are these start up firms who approached this model with a certain level of naivety that can be attributed to “being green”? Are these experienced people?
Where there is smoke there is fire. While a fires heat and intensity has a center, there are usually separate hot spots that need attention too. Who are some of the other non attorney players involved that may be smoldering in the surrounding environs? Are there other “in name only” outfits operating with a similar “cute” model that are at risk of spontaneous combustion?
It’s important to not that Illinois did not go after Legal Helpers Debt Resolution just on fees. They alleged violations of section 105, 110, 115, 120, 125, 130, 135, 140, or 150 of the IL DSCPA.
Section 105. Advertising and marketing practices.
Section 110. Individualized financial analysis.
Section 115. Required pre-sale consumer disclosures and warnings.
Section 120. Debt settlement contract.
Section 125. Fees.
Section 130. Consumer settlement accounts and monthly accounting.
Section 135. Cancellation of contract and right to fee and settlement fund refunds.
Section 140. Obligation of good faith.
Section 150. Noncompliance with the Act.
The key point however is are attorneys exempt from the regulation.
It’s important to not that Illinois did not go after Legal Helpers Debt Resolution just on fees. They alleged violations of section 105, 110, 115, 120, 125, 130, 135, 140, or 150 of the IL DSCPA.
Section 105. Advertising and marketing practices.
Section 110. Individualized financial analysis.
Section 115. Required pre-sale consumer disclosures and warnings.
Section 120. Debt settlement contract.
Section 125. Fees.
Section 130. Consumer settlement accounts and monthly accounting.
Section 135. Cancellation of contract and right to fee and settlement fund refunds.
Section 140. Obligation of good faith.
Section 150. Noncompliance with the Act.
The key point however is are attorneys exempt from the regulation.
If providing legitimate legal services consistent with all applicable state and federal rules and laws in each and every jurisdiction, probably.
That is not what is happening in the instant case.
The advertised service is being promoted and performed by non attorneys. These non attorneys benefit the most financially. This appears to be an “attorney in name only” thing which Searns openly refutes in the Tribune article, but that appears to be an accurate description.
The team with the IL AG also raise violations of law not associated with the Debt Settlement Consumer Protection Act. That was wise. The case will not hinge on DSCPA alone.
AG’s nationwide (again – no pun intended) could similarly bring actions that rely upon their individual tests for Unfair & Deceptive Acts as the primary focus, or supplemental to, each case. Each case from its outset need only survive early motion practice so that discovery requests can begin to be fulfilled. My guess is it would be Game Over a short time later.
I know there has been ample coverage of LHDR here and elsewhere, but who are Eclipse and Nationwide? Who runs those outfits? What assumptions did management at these companies make that led to this being grown out? Are these start up firms who approached this model with a certain level of naivety that can be attributed to “being green”? Are these experienced people?
Where there is smoke there is fire. While a fires heat and intensity has a center, there are usually separate hot spots that need attention too. Who are some of the other non attorney players involved that may be smoldering in the surrounding environs? Are there other “in name only” outfits operating with a similar “cute” model that are at risk of spontaneous combustion?
FYI, previous articles on Nationwide Support Services that may help to fill in some of the gaps.
Here is one past reader question from a debt settlement employee that mentioned LHDR and Eclipse.
Thank you. I see you have been waaaay ahead on these issues. I briefly scanned the links you provided. One link in particular laid out some things of interest:
# Legal Service Support Group, LLC is a Nevada corporation that is owned by three companies: Lynch Financial Solutions, JEM Group, and Century Mitigations. – Source
* Lynch Financial Solutions is a Florida corporation owned by Thomas Lynch, Jr and the officers are Maryana Gomez and Dale Weikel. – Source
* JEM Group is owned by Joanne Garneau and Arthur Garneau. JEM Group was just named in the class action suit against Legal Helpers Debt Resolution.
o The Garneau’s also own Nationwide Support Services, Inc. – Source
* Century Mitigations, LP is owned by Consumer Finance Alternatives, Inc. – Source
o Consumer Finance Alternatives is owned by Dave Leuthold and Amy Michalo is the treasurer. – Source
+ Amy Michalo is the president of Century Negotiations, Inc. – Source
# The attached spreadsheets refer to TFG receiving money as part of the added on up-sell financial coaching program. I believe TFG refers to Financial Strength Builders, see this article, which is really owned by Joanne Garneau and Arthur Garneau. – Source
The players are not “green” or newbies in the least. They appeared to be seasoned veterans. They also appear to populate and to be, or to have been, heavily involved with an industry trade group.
I am seriously of the belief that a dozen or more AG’s could file actions that mirror the one in IL with minor edits to include their own respective UDAP code sections. It would not require all that much really. It would seem to me that including some the industry veterans above as named defendants would provide a bountiful harvest.
I am somewhat familiar with the recent amendments to the TSR. Does it provide for private right of action? I ask only because the consumer bar may have their own angle to explore with this. If so, perhaps litigation risk and cost estimates have been grossly underestimated by many.
I am glad you’ve notice and all this time other companies attacks Steve for releasing these type of information when Steve should be getting paid for posting these valuable information on his site.
Steve gets paid trust me he gets paid well… do you think steve spends hours because he loves doing this. You guys are like sheep
15 USC 6104, Actions by private persons:
Any person adversely affected by any pattern or practice of telemarketing which violates any rule of the Commission under section 6102 of this title, or an authorized person acting on such persons behalf, may, within 3 years after discovery of the violation, bring a civil action in an appropriate district court of the United States against a person who has engaged or is engaging in such pattern or practice of telemarketing if the amount in controversy exceeds the sum or value of $50,000 in actual damages for each person adversely affected by such telemarketing. Such an action may be brought to enjoin such telemarketing, to enforce compliance with any rule of the Commission under section 6102 of this title, to obtain damages, or to obtain such further and other relief as the court may deem appropriate.
Thanks.
Excellent question about the “private right of action.” I didn’t know so I went to the FTC who said.
“There is a private right of action, but damages must exceed $50,000 to bring a private claim. Here’s the applicable provision of the Telemarketing Act:
15 USC § 6104. Actions by private persons
(a) In general
Any person adversely affected by any pattern or practice of telemarketing which violates any rule of the Commission under section 6102 of this title, or an authorized person acting on such person’s behalf, may, within 3 years after discovery of the violation, bring a civil action in an appropriate district court of the United States against a person who has engaged or is engaging in such pattern or practice of telemarketing if the amount in controversy exceeds the sum or value of $50,000 in actual damages for each person adversely affected by such telemarketing. Such an action may be brought to enjoin such telemarketing, to enforce compliance with any rule of the Commission under section 6102 of this title, to obtain damages, or to obtain such further and other relief as the court may deem appropriate.”
The $ barrier to entry will be a limiting factor, but there are fish in there for sure.
Any comment from Mr. Crockson?
Alleged no Proof and i can promise you that and once it comes out i will come back to this website and come out everyone that said it was going on. Then ill send a message to steve and request a full article to be written on how LHDR is still in business
Don’t worry, I’ll report on the case either way.
lol have the stuff you report isnt right Steve you are a scam because u say you dont make money on this website but thats a lie and anyone that comes to you I prey for them…
I never said I don’t make money. What I’ve told you before is that I address all of this in the site terms.
I should add that in the full course of time, should the acts and actions of LHDR and similar creative models prove to be worthy of pursuing from the TSR angle, I think Global Client Solutions and NoteWorld as providing substantial assistance will blow up if they are involved with any of this.
Dear Ms. Madigan, FTC Staff, State Regulators and Industry,
This case against LHDR is hopefully the appetizer in a 7 course meal. Whetting the appetite for the dish yet to come.
As the filing from Madigan is positioned to scrutinize LHDR behavior prior to TSR rule enactment, it also presents a fantastic opportunity to identify in great detail, through the discovery process, what has been going on post 10/27/11.
LHDR will defend the suit in its preliminary stages. Perhaps they think that their change in contracts in Oct 2010 to include actual legal representation will protect them. Their challenge in the present suit, is that was not part of their contract prior, and the IL suit includes those consumers sold a bill of goods prior to the contract change. I am of the opinion that the legal representation that was added to their contacts shortly before the advance fee ban enactment date of the TSR was poorly thought out as a means for the marketers and affiliates to appear to be insulated from the TSR. This should soon prove to be a bad bet.
The firm offers other services, to be sure. I am of the opinion that when the numbers of clients taken in for debt settlement in the past 6 months are compared to clients taken in for other services are compared, the amount of debt settlement clients will win by a measure of 10 to 1 or more. If I am correct, this number will paint them as a firm whose primary business is debt settlement. That should prove interesting to some.
Using pre legal representation contract numbers of IL residents in the suit, the potential costs to the firm, and perhaps others who benefited financially, could reach tens of millions. This figure does not include costs should a judge void contracts and require refunds be issued.
The fee scheme outlined in the suit flies in the face of fee limits in IL. It also flies in the face of many fee structures set by states who adopted the UDMSA. This should be of interest to several other attorney generals. Budgets being what they are today, it is helpful to have some slamdunkery placed on your desk that is cost effective to pursue while also delivering the strongest deterrent factor. In many states, it should prove a good use of regulatory resource time to sit down and speak with LHDR affiliate attorneys in order to discuss claims of attorney representation, attorney file review, attorney client contact, attorney supervision and control. You may find none of this exists in any meaningful way.
I am wondering why the IL AG team left out the many affiliate marketers and non attorney providers like Nationwide and Eclipse. Perhaps those have been strategically left out because they have been targeted in a separate and larger action that has yet to surface. That would be my guess. The IL complaint was styled in a way that could have easily included LHDR affiliates, marketers and contracted non lawyer services. The 1100 plus IL residents in the suit is nothing compared to the many thousands that have been enrolled nationwide (no pun intended). The effect of a major action against the non attorney profiteers involved with LHDR (and others) who thought to get cute and creative will be a welcome event. Might I suggest that action be allowed to progress post haste?
Thank you for your diligence and attention to the LHDR issue. I trust similar efforts are either being planned, or are in motion, to bring against other bad actors.
Dear Ms. Madigan, FTC Staff, State Regulators and Industry,
This case against LHDR is hopefully the appetizer in a 7 course meal. Whetting the appetite for the dish yet to come.
As the filing from Madigan is positioned to scrutinize LHDR behavior prior to TSR rule enactment, it also presents a fantastic opportunity to identify in great detail, through the discovery process, what has been going on post 10/27/11.
LHDR will defend the suit in its preliminary stages. Perhaps they think that their change in contracts in Oct 2010 to include actual legal representation will protect them. Their challenge in the present suit, is that was not part of their contract prior, and the IL suit includes those consumers sold a bill of goods prior to the contract change. I am of the opinion that the legal representation that was added to their contacts shortly before the advance fee ban enactment date of the TSR was poorly thought out as a means for the marketers and affiliates to appear to be insulated from the TSR. This should soon prove to be a bad bet.
The firm offers other services, to be sure. I am of the opinion that when the numbers of clients taken in for debt settlement in the past 6 months are compared to clients taken in for other services are compared, the amount of debt settlement clients will win by a measure of 10 to 1 or more. If I am correct, this number will paint them as a firm whose primary business is debt settlement. That should prove interesting to some.
Using pre legal representation contract numbers of IL residents in the suit, the potential costs to the firm, and perhaps others who benefited financially, could reach tens of millions. This figure does not include costs should a judge void contracts and require refunds be issued.
The fee scheme outlined in the suit flies in the face of fee limits in IL. It also flies in the face of many fee structures set by states who adopted the UDMSA. This should be of interest to several other attorney generals. Budgets being what they are today, it is helpful to have some slamdunkery placed on your desk that is cost effective to pursue while also delivering the strongest deterrent factor. In many states, it should prove a good use of regulatory resource time to sit down and speak with LHDR affiliate attorneys in order to discuss claims of attorney representation, attorney file review, attorney client contact, attorney supervision and control. You may find none of this exists in any meaningful way.
I am wondering why the IL AG team left out the many affiliate marketers and non attorney providers like Nationwide and Eclipse. Perhaps those have been strategically left out because they have been targeted in a separate and larger action that has yet to surface. That would be my guess. The IL complaint was styled in a way that could have easily included LHDR affiliates, marketers and contracted non lawyer services. The 1100 plus IL residents in the suit is nothing compared to the many thousands that have been enrolled nationwide (no pun intended). The effect of a major action against the non attorney profiteers involved with LHDR (and others) who thought to get cute and creative will be a welcome event. Might I suggest that action be allowed to progress post haste?
Thank you for your diligence and attention to the LHDR issue. I trust similar efforts are either being planned, or are in motion, to bring against other bad actors.
I should add that in the full course of time, should the acts and actions of LHDR and similar creative models prove to be worthy of pursuing from the TSR angle, I think Global Client Solutions and NoteWorld as providing substantial assistance will blow up if they are involved with any of this.
Joe, they never mentioned their legal nest egg to me but I wouldn’t doubt it, when this is all over I’m sure they will have used all that and more. The problem is that they’ve probably only earned about $1M of that, the remaining $5M is for debt they’ve “promised” to settle in 2012.
Andy, didnt the rep pitch you that LHDR have $6 million put away to fight stuff like this? lol
This has the opportunity to actually finally change everything in the debt settlement industry. That is, I assume, if other AG’s follow suit & if the other attorney models heed the warning. There are many states where LHDR’s fees are not in violation of the law. Funny, their fees are in violation & then some in CT but the CT Banking Commission approved them as a “debt Adjuster”!!
Personally, I wonder if other AG’s will wait & see how the lawsuit goes. Also, i would have thought the model itself stood a better shot at dying at the hands of Bar Associations looking at the “of counsel” lawyers being paid to do nothing.
… and oh yea, to all those reps that have been relentlessly calling our office trying to pitch us the LHDR model for six months now … “I told you so”
The whole notion that the attorney model has an exemption has been idiotic since the day the idea was hatched. They should have known this was inevitable since day one.
The law says, you don’t piss on a cruiser if you don’t want to get arrested. LHDR has been standing on the hood, jumping up and down, and letting it fly since 10/27. How about a round of applause for AG Madigan, for getting her raincoat on and being the first to go in there to try and get the cuffs on them.
I’m sure they plan to tie this up in court for as long as they possibly can and will surely cost them an awful lot of money doing it. Hopefully the press this picks up will be the writing on the wall for their affiliates and prospective consumers, and the feeding tube starts to get pinched as well.
The whole notion that the attorney model has an exemption has been idiotic since the day the idea was hatched. They should have known this was inevitable since day one.
The law says, you don’t piss on a cruiser if you don’t want to get arrested. LHDR has been standing on the hood, jumping up and down, and letting it fly since 10/27. How about a round of applause for AG Madigan, for getting her raincoat on and being the first to go in there to try and get the cuffs on them.
I’m sure they plan to tie this up in court for as long as they possibly can and will surely cost them an awful lot of money doing it. Hopefully the press this picks up will be the writing on the wall for their affiliates and prospective consumers, and the feeding tube starts to get pinched as well.
… and oh yea, to all those reps that have been relentlessly calling our office trying to pitch us the LHDR model for six months now … “I told you so”
This has the opportunity to actually finally change everything in the debt settlement industry. That is, I assume, if other AG’s follow suit & if the other attorney models heed the warning. There are many states where LHDR’s fees are not in violation of the law. Funny, their fees are in violation & then some in CT but the CT Banking Commission approved them as a “debt Adjuster”!!
Personally, I wonder if other AG’s will wait & see how the lawsuit goes. Also, i would have thought the model itself stood a better shot at dying at the hands of Bar Associations looking at the “of counsel” lawyers being paid to do nothing.
Andy, didnt the rep pitch you that LHDR have $6 million put away to fight stuff like this? lol
Joe, they never mentioned their legal nest egg to me but I wouldn’t doubt it, when this is all over I’m sure they will have used all that and more. The problem is that they’ve probably only earned about $1M of that, the remaining $5M is for debt they’ve “promised” to settle in 2012.