Persels & Associates Complaints: Lawyers Win Big

A reader and tipster (send in your tips here) sent me in a copy of the class action settlement agreement that has been presented to the court in the Persels & Associates class action case that began in November of 2010. Actually this looks like it was a fairly speedy affair.

The class action settlement states there were 125,012 consumers nationwide who entered into retainer agreements with P&A after April, 2005 for debt help related services.

The award issued provides the named Plaintiff, Miranda Day with $5,000. All covered class members agree to not sue Persels & Associates or Care One for any claim covered by the class action suit.

Excluded from the suit are members of a class action suit that were included in Bronzich v. Persels & Associates, LLC, et al., No. CV-I0-00364-EFS which is currently pending in the United States District Cour for the Eastern District of Washington.

The attorneys that brought this suit will receive up to $300,000.

It does not appear that any other consumers covered by this agreement will receive any financial compensation.

The settlement denies any admission of wrongdoing or statement that the facts raised were truthful and requires that Persels & Associates does the following:

The Law Firm Defendants shall collect fees from consumers for Debt Settlement Legal Services only after negotiation of a settlement with the consumer’s creditor. The Parties agree, however, that this provision (A) does not foreclose the Law Firm Defendants from collecting fees before a settlement is negotiated to the extent permitted by law; (B) does not apply to nor does it modify, alter or change the terms of any retainer agreement entered into by P&A prior to October 1, 2010; and (C) does not apply to services not characterized as Debt Settlement Legal Services such as the preparation of pleadings, legal consultation, analyzing and prosecuting claims for violation of the Fair Debt Collection Practices Act or similar consumer protection statutes and the preparation of banptcy papers.

The Law Firm Defendants shall modify the retainer agreement with their clients prospectively to clearly and conspicuously disclose:

(A) An estimate of the total amount that wil be paid in legal fees under the retainer agreement based on estimates of the amounts for which debts wil settle. The retainer agreement also wil provide that after a settlement is negotiated, the Law Firm Defendants shall inform the consumer of the exact amount of legal fees that wil be paid in connection with that settlement under the retainer agreement.

(B) An estimate of the amount of each payment that wil be applied to legal fees under the retainer agreement based on an assumption of the amount of the anticipated settlement.

(C) An estimate of the anticipated date on which the client’s debts will be satisfied under the terms of the negotiated settlements assuming all payments are received timely and made in fulL. The retainer agreement also wil provide that after a settlement is negotiated, the Law Firm Defendants shall provide the consumer with the exact date on which the client’s debts wil be satisfied under the terms of the negotiated settlement assuming all payments are received timely and made in full.

(D) The nature of services included in the retainer agreement and the services that are available at an additional cost.

(E) The cost of each additional, available service not included in the retainer agreement. To the extent the Law Firm Defendants agree to provide a service not previously identified in the retainer agreement, they shall inform the client in advance of the cost of such service.

CareOne, in its role of providing administrative support services to P&A and customer service to clients of P&A, shall comply with and shall assist P&A to comply with its obligations to provide the agreed-upon injunctive relief described above. If CareOne’s contractual relationship with P&A terminates at any time for any reason, CareOne shall no longer be obligated to assist P&A to comply with the agreed-upon injunctive relief.

The Notice Class Members Received

The nonprofit named in the proposed class action that received the $100,000 was the American Bar Foundation.

You can read the entire settlement agreement, here.

You can read the original suit, here.

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Steve Rhode The Get Out of Debt Guy | Consumer Debt Expert

Consumer debt expert & investigative writer. Personal bankruptcy survivor (1990). Washington Post award-winning author. Exposing debt scams since 1994.

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