On October 26, 2011 Morgan Drexen sent out a press release titled “Success for Morgan Drexen as Utah Confirms Compliance.”
Following the release I made an inquiry with the State of Utah at the request of a reader who had a question about the information in the release.
Let me sum up the State of Utah response as not good for Morgan Drexen or any debt management company or attorney model debt settlement company that may want to do business in Utah and is not in full compliance with the Utah Debt Management Services Act.
First, here is the press release that Morgan Drexen sent out:
“The Utah Division of Consumer Protection confirms for the support it provides to attorneys. California-based Morgan Drexen does not require a license under the Utah Uniform Debt Management Services.
Costa Mesa, CA (PRWEB) October 26, 2011
The Utah Consumer Protection Division put forward questions expressing concerns with regards to Morgan Drexen servicing clients in Utah, while exploring another matter in the state. Morgan Drexen provides integrated support platforms to attorneys’ nationwide including Utah.
“Because it is riding the wave of the paradigm shift that the entire legal world is experiencing, the business model of Morgan Drexen is often misunderstood by those who are accustomed to the age-old traditional model of practicing law,” says Jeffrey Katz General Counsel at Morgan Drexen.
Morgan Drexen clarified to the Division of Consumer Protection that any attorney providing debt management to Utah consumers does establish an attorney-client relationship. They will also continue to monitor and approve settlement offers and negotiate settlements.
“The Chief Investigator is in full agreement that Morgan Drexen as out sourced support doesn’t offer or provide debt management services to the consumers of Utah. The services of Morgan Drexen extend, as in other states only to Morgan Drexen’s clients -the attorneys we support. Accordingly, Utah’s Department of Commerce will not require that Morgan Drexen secure license under Utah’s Uniform Debt Management Services Act,” adds Katz.
According to, Candice Vogel, a Utah attorney with Manning Curtis Bradshaw & Bednar LLC and outside counsel for Morgan Drexen. “The Utah Division of Consumer Protection was concerned about ensuring compliance by Morgan Drexen, and its attorneys operating in Utah. The uniqueness of Morgan Drexen’s business model does at times lead to confusion and concerns by others, including administrative agencies such as the Utah Division of Consumer Protection.”
“Utah Division of Consumer Protection on learning more about the business of Morgan Drexen and the support platforms we provide has been more than helpful in their guidance. Their mission is to protect consumers from unfair or deceptive practices and to encourage the development of fair business practices. They showed great competence in working with Morgan Drexen to obtain a better understanding,” adds Katz.
“The outcome was a good one in that we were able to explain to the Division of Consumer Protection specifically how Morgan Drexen operates and to alleviate the Division’s concerns,” adds Vogel.
“Earlier this year the Utah Department of Commerce released statistics for consumers detailing the top ten consumer complaints. They warn consumers to remain vigilant and educate their consumers which is a great asset to them,” concludes Katz.” – Source
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Utah Responds
Traci Gunderson, the Director of the Utah Division of Consumer Protection sent me this statement to share with readers in response to the Morgan Drexen press release.
“Morgan Drexen was cited for violating the Utah Telephone Fraud Prevention Act, UCA 13-26-1 et seq., for failing to have a telemarketing permit before making sales pitches into Utah. As part of their sales pitch, Morgan Drexen was selling debt management services to Utahns, which services were to be provided by another law firm, Howard Nassiri. Howard Nassiri did not have a permit to act as a Debt Management provider in Utah. Therefore, Howard Nassiri was cited for failing to do so.
At the hearing, Morgan Drexen was dismissed because the witness could not recall with specificity whether he received a phone call (which would be a violation of the TFPA) or a mailer (which is not). The only guidance Morgan Drexen should reasonably take from this is to become registered with the Division before telemarketing into Utah.
Following the hearing, Howard Nassiri was found in violation of providing debt management services in Utah without being registered. They argued that they were exempt as attorneys under the attorney exemption, but the Division determined they did not meet that exemption due to their failure to be licensed in Utah. Therefore, they were ordered to return all fees and charges to the consumer. Only attorneys licensed to practice law in Utah can establish an attorney-client relationship to provide debt management services for Utahns.
Both Morgan Drexen and Howard Nassiri are clearly in need of clarification that any attorney without a Utah license to practice law would be required to register as a debt management service provider in Utah before they could offer their services here.
Morgan Drexen clearly misunderstands their dismissal from the case, and apparently the uniqueness of Morgan Drexen’s business model confuses even themselves if they thought a dismissal on a telemarketing violation constitutes the Division’s endorsement of their business practices.
Moreover, it is an absolute misrepresentation to characterize our chief investigator’s position as one of endorsement of their business model. Our chief investigator is the one who issued the citation to both law firms.
Any law firm not licensed in Utah is absolutely required to register with our Division to become a debt management service provider in Utah.
Our concerns regarding Morgan Drexen are not alleviated in the slightest by the dismissal, and their statements contained in the recent article place them squarely back on our radar as a possible violator of our Debt Management Services Act.” (Emphasis added.)
The State also attached Administrative Citation issued to Morgan Drexen Intergrated Legal Systems.
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The nuts on this guy… Walter, not only do you advertise like you invented it, but you have no regard for the law. You have a target on your back from (probably) every possible regulator out there and what do you do? You issue a freakin press release saying that Utah says you are compliant AFTER THEY DID NOTHING BUT FINE YOU FOR NOT BEING LICENSED. You, sir, are a dumbass.
Are you really this stupid?