This comes from the WV AG press release but I’ve requested a copy of the complaint from the State.
What’s interesting about this announcement is that the AG office also went after the local attorneys in West Virginia as well.
Attorney General Darrell McGraw Sues Kansas, California, and West Virginia Lawyers to Halt Morgen Drexen Debt Collection Business
CHARLESTON – West Virginia Attorney General Darrell McGraw filed suit Friday in the Circuit Court of Kanawha County to ban Morgan Drexen, Inc., a company claiming to provide debt settlement services, from doing business in the state. The lawsuit names as defendants Morgan Drexen’s principal owner Walter J. Ledda, attorneys Lawrence W. Williamson of Kansas and Rachelle McIntyre-Nicholson of West Virginia, and the California law firm of Vincent Howard and Damian Nassiri.
In his complaint, Attorney General McGraw asks the Court the enjoin the out-of-state lawyers from practicing law in West Virginia and cease operation of their unfair and deceptive debt settlement business.
Morgan Drexen, Inc., a Nevada company based in greater Los Angeles, claims to be an attorney support services company, providing paralegal and paraprofessional services to attorneys across the country who offer debt settlement services. Attorney General McGraw alleges that Morgan Drexen is actually selling debt settlement services to West Virginia consumers by misrepresenting that the services are being provided by lawyers. Lawyers licensed to practice law in West Virginia are exempt from some state regulations governing the debt settlement industry.
“Although the debt settlement approach to debt relief may work for some persons, the service has legal consequences and should only be offered by persons licensed to practice law in West Virginia,” Attorney General McGraw said. “My office must protect consumers, especially those who are already facing dire financial circumstances, from paying excessive fees for supposed debt relief services that may in fact leave them in worse financial shape.”
Debt settlement companies such as Morgan Drexen, Inc. claim to assist financially struggling consumers with settling their credit card debts for significantly less than what is owed. Debt settlement companies develop repayment plans to help consumers pay outstanding debts at a deep discount to avoid being sued or filing for bankruptcy. Consumers are instructed to make payments directly to the debt settlement company instead of their creditors, in turn for which the debt settlers claim to negotiate with creditors to reduce the amount of debt owed.
Morgan Drexen maintains that it can avoid applicable state debt collection laws and charge higher fees than normally allowed by linking its operations to licensed lawyers, who attempt to get creditors to accept less than what is owed on outstanding debts. McGraw contends that these “enrollment lawyers” do no substantive work and are merely renting out their licenses to Morgan Drexen.
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