A very interesting article in the Star Tribune was brought to my attention by a reader. It calls for a closure of the debt settlement loophole in Minnesota that allows attorneys to collect advanced fees.
Kara McGuire wrote, “In Minnesota, laws are on the books that forbid charging steep upfront fees for promising to negotiate a deal with creditors to pay less than the dollar amount owed. The negotiating work has to be done first.
But some unscrupulous outfits have found a way to skirt the law and continue collecting upfront payments anyway. Their weapon?
Lawyers. – Source”
“It’s particularly galling,” said Minnesota Attorney General Lori Swanson. “Here you’re seeing people who have a special privilege — the privilege to practice law — abusing consumers who are down on their luck.”
It points out how the loophole has not been recognized for what it is, a way to collect advanced fees that does not benefit consumers.
Minnesota reports only nine companies are licensed to provide debt settlement services in the State and that there are ongoing investigations.
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