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
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