Global Client Solutions and Rocky Mountain Bank & Trust Said to Have Aided and Abetted Debt Settlement Companies to Violate Statute

A regulator friend of mine just forwarded me a copy of the State of Washington amicus brief filed in a class action case I reported about previously. The case is Carlsen v. Global Client Solutions and Rocky Mountain Bank & Trust. – Source

The State of Washington weighed in on the matter and make some strong statements that do not shield escrow companies of potential liability when working with debt settlement companies that violate the law.

Brief Summary

Everything below is from the amicus brief filed. You can read the full brief here.

  • Washington says Debt Adjusting Act and fee limits apply to the debt settlement companies that Global Client Solutions and Rocky Mountain Bank & Trust work with and serve.
  • State there is a private cause of action against Global and Rocky if the helped debt settlement companies violate the Debt Adjusting Act.
  • States that aider and abettors can be civilly liable for assisting others to violate the Debt Adjusting Act.
  • States holding Global and Rocky accountable is important.
  • Debt settlement companies are debt adjusters and statutory fees in Washington apply to them.
  • There is an implied cause of action under 874A and Bennett against Global and Rocky for aiding and abetting debt settlement companies that violate the debt adjusting act.
  • Helping debt settlement companies violate the Debt Adjusting Act can also result in aiding and abetting liability.
  • “If Global and Rocky provided the means and instrumentality to violate the law, then they should be liable under consumer protection law.”
  • “A party shall be responsible for the fault of another person…where both were acting in concert…”
  • Civil aiding and abetting liability can lie against Global and Rocky for any of four reasons.”


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48 thoughts on “Global Client Solutions and Rocky Mountain Bank & Trust Said to Have Aided and Abetted Debt Settlement Companies to Violate Statute”

  1. Vend, your bringing up the Debt Manager attribute is the only place I have seen the reference.

    You refer to your interest in this topic winding down in your comment above. Mine is just getting started. If you would not mind and if it is not too much trouble, could you comment with more information about GCS once using Rocky Mt. and how they now use MidFirst Bank?

    What happened?

  2. Well, when I said self-save, I actually meant cut out the 2 middlemen altogether…
    1. The DS company
    2. The payment processor

    I should have said “self-settle”. DS companies don’t do anything an individual couldn’t do if they knew how.

    I have many clues. 🙂

  3. Calculator, you have really dug into this. I’m pretty much done here, it is obvious what was going on and who is at the center of it as far as making it possible/easier by processing the transactions. This involves DS companies from all over the U.S. Whether the scheme is legal or not is up to the “powers”. Either way, GCS was not an innocent bystander.

    I mainly wanted to make sure that Global’s Debt Manager was brought up since it was not mentioned in the descriptions of what they do. BTW, didn’t GCS start using MidFirst Bank last year? Not sure if it was part of the LHDR caper or just because Rocky Mt. was getting too “hot”. Wonder how MidFirst escaped this? Don’t see them named (yet).

  4. From what I’ve seen of Debt Manager it looks like more than just a casual database.

    Debt Manager includes a number of features including a “Sales Module including lead monitoring, task management and appointment calendar.” I agree, a simple database to facilitate the escrow services is innocent but is probably another thing when the escrow company actively sells a tool that aids the company in selling/closing deals. It even tracks and charts closes.

  5. I would be surprised to learn that the 2 primary escrow service providers to the industry came out against up front fee models and yet still work with companies using them. Was coming out against them done publicly? In the media?

    Whose attorney signs off and gives the green light? The attorney for escrow or for the “in name only” service provider such as Searns or Macey for LHDR? Who audits the applicant and the model used for compliance? What measures are included in the audit?

    Saying one thing and doing the other is not the best confidence builder.

    The TSR rule has a narrow carve out for attorneys that, when fully vetted given the test of time, will not exempt poorly constructed work-a-rounds with an attorney name attached to it. In fact, I suspect they will be targeted.

    Claiming exemption based on a narrow carve out and then partnering with veterans who brought the need for regulatory intervention in the first place while using the same tools and conduits is a recipe for disaster. The financial risk/reward when engaging in creative methods to circumvent laws just does not compute.

    $10 a month for 36 months is $360.00. Transaction fees for the settling of 5 accounts would maybe add $150.00 more to the lifetime value of the account. How is $510.00 worth the risk of being fined 15, 10 or even 5 thousand per violation?

    Certainly there is volume to discuss. $510.00 times 10,000 is not chump change. Perhaps the risk/reward is the assumption that if called to the carpet, a settlement can be reached for 10 or 20 percent of the gains.

    I don’t know… the whole thing seems so slip shod in its construct. Do you put your good name, reputation, license, company, shareholders on black and let-er spin thinking your odds are pretty good?

    While lawyers are not generally within the regulatory purview of the FTC, those offering support services and conduits are. Nationwide & Eclipse participation will come out in great detail during the discovery phase of the IL AG action against LHDR if the case progresses to that level. Those support services are unlikely to be viewed as work product.

    When compared with a concerted effort put forward by multiple attorney generals against some of these outfits using their own states Unfair & Deceptive Acts as the premise of their case, some targets may have preferred to have dealt with the FTC in one action instead.

    I know this thread is about Global Client Solutions and the Washington state issue, but this entire topic has captured my curiosity. I apologize for drifting off topic, though in a somewhat connected way.


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