Legal Helpers Debt Resolution was hit with a $314,000 fine today and issued a cease and desist letter to immediately stop its unlicensed debt adjustment business in Illinois. The State of Illinois found that LHDR cannot avail itself of an exception as attorneys under the Illinois debt settlement laws.
The cease and desist letter was issued by the Illinois Department of Financial and Professional Regulation.
“The order details the experience of one customer: Legal Helpers charged a client (T.G.) an “initial flat fee retainer payment” of $500, and a $50 monthly maintenance fee. In addition, Eclipse, a subcontractor of Legal Helpers, charged a service fee of 15% of the total scheduled debt to be paid in installments commencing immediately upon preparation of the debt resolution plan. Between August 13, 2010, and May 20, 2011, T.G. paid $3,411.92 to Legal Helpers and its subcontractor – $3,121.91 in fees and only $290.01 set aside for the payment of debt. Further, there is evidence that neither Legal Helpers nor its third party assigns settled any of T.G.’s debts.”
In addition to operating a debt settlement firm in Illinois without the appropriate debt settlement license, IDFPR learned that despite the name, “Legal Helpers”, the company does not provide legal representation to consumers or otherwise act in an attorney capacity. The person signing contracts with Legal Helper’s clients is not licensed to practice law in Illinois.
The suit, which continues, filed by Illinois Attorney General Madigan alleged the company charged upfront fees in violation of the Illinois Debt Settlement Consumer Protection Act. That suit is ongoing.
According to the cease and desist notice issued today, Legal Helpers Debt Resolution must immediately cease and desist from engaging in the debt settlement business.
The order also find that beginning August 3, 2010, all existing contracts entered into between Legal Helpers Debt Resolution and Illinois consumers for debt settlement services are unlawful and therefore declared VOID.
Legal Helpers Debt Resolution must repay the State of Illinois an amount equal to four times the total amount of Illinois consumer debt that Legal Helpers Debt Resolution enrolled in debt settlement programs. – Source
Steve
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Are the sales people scattering like rats?
I’d like to hear what they are saying on their regular sales conference calls that they do.
I wonder if they are formulating their response a going to fight this hand over first.
Is their any chance they beat the action?
Before you all burst with gloating, this is only the first step in what can be drawn out into a years-long process. Administrative hearings, then court review, then appeals. These regulators are not well staffed and financed, and the state of Illinois is essentially broke.
Also, regrettably, you can’t really bank on the competence of an office that can’t even redact documents properly. The complainant names are right on the POA. Legal Helpers is in an excellent position to exhaust their resources and settle on acceptable terms.
So let the truth come out as it should. We will see how many more AG’s will figure that they are in a position to collect fines.
I hope that somehow many consumers will take notice of this and ask tough questions of the potential company offering to service the consumer.
It has been just over 1 year since the TSR got passed and hopefully more companies will take note, do what is right or expose yourself to actions.
Thanks for getting this out Steve
Alex Viecco.
According to the C&D LHDR is liable to Illinois for four times the total debt enrolled in the debt settlement programs and not just the fees charged. That’s potentially a huge number.
Also interesting was the naming of the Florida based subcontractor.
How much of the LHDR money will the state keep and how much will the consumers be paid back? I am guessing that the state will profit big time and once again the consumers are the ones holding the bag? Can you clarify on this, Steve?
Actually, according to the Illinois C&D LHDR must pay full restitution to Illinois residents plus they are liable for four times the amount of debt enrolled as a penalty to the State. You can read the full C&D here.
So it appears Illinois residents will get all their money back if LHDR complies.
Show Me The Money…
Can you say “referral for disciplinary action”?
That’s right boys and girls, I knew you could.
Forgot to share this on twitter.
Regulators 1
Legal Helpers 0
Game on!!!!
Great News for consumers. It is about time we see some enforcement action on these guys. Hopefully other states will follow suit and prevent Legal Helpers Debt Resolution from bringing any more consumers into their program
Regulators 1 Legal Helpers 0
Game on!!!!