A tipster (send in your tips here) just sent me a copy of a recent case filed by the Attorney General of Florida against Consumer Law Group, Michael Metzner, David Ran Barnea, Ran Barnea, and Daniel Post.
This seems to be an excellent case of the advanced fee debt settlement legal model, unraveling.
It was not all that long ago I was writing about the settlement in North Carolina and the Attorney General there. See all the Consumer Law Group articles here.
In January of 2012 the Office of the Florida Attorney General, Department of Legal Affairs filed suit against the Consumer Law Group crew and stated the State of Florida conducted an investigation and felt that an enforcement action was necessary to serve the public interest.
Michael Metzner is said to have been the owner of The Consumer Law Group, PA. Ran Barnea and Dan Post are officers, shareholders and/or directors of American Debt Negotiators.
The State alleges Consumer Law Group engaged in deceptive or unfair trade practices since Consumer Law Group had not conformed to the requirements to be qualified as a professional service corporation to render legal services in the practice of law in the State of Florida.
The complaint states Consumer Law Group misrepresented to the public that they were a “duly organized professional services corporation and qualified to render legal services in the State of Florida” or that it was an office for the practice of law.
Consumer Law Group sold debt settlement services and required advance fees for services before debt settlement services were rendered. Additionally they are said to have misled and/or deceived the public that debt settlement or debt management are services that they are able to provide as a law firm.
This is what the homepage of their site looked like in June of 2010. It certainly appeared they were a law firm and referred to themselves as “our Law Office.”
As a result of the foregoing, the consumers who execute agreements and pay fees are misled and deceived into paying for punitive legal services when The Consumer Law Group, P.A. is not a duly organized professional services corporation conforming to the requirements of Chapter 621 of the Florida Statutes and qualified to render legal services in the practice of law in the State of Florida.
The lawsuit accuses the Defendants of engaging in the unauthorized practice of law “by representing and/or offering legal services to consumers for debt settlement and/or debt management.”
If the State of Florida prevails on their lawsuit against The Consumer Law Group they are asking to claw back all ill-gotten gains as a result of the enterprise. Additionally, the State wants to award restitution to all consumers that have been injured by Defendants.
On top of that the State is asking for an additional fine of $10,000 for each act or practice found to be in violation. That will really ad up.
The suit specifically targets the referral of consumers to a perceived legal practice in order to evade the applicable Florida provisions. This is a huge step for Florida to take to eradicate all of the other outfits who have engaged in a similar business plan.
Defendants solicited or otherwise procured financially distressed consumers for attorney referrals. Said consumers, in need of debt reduction services, were referred by Defendants to licensed attorneys in return for payments by the attorneys to the Defendants from the fees paid by the referred consumers to the attorneys. The fees to Defendants were paid contrary to The Rule Regulating The Florida Bar as unlawful fee sharing…
Florida says the Defendants intended to get around charging consumers by establishing attorney referrals for which they got paid. Those in the debt relief industry will recognize this common practice by those trying to evade the advanced fee regulations by working with alleged law firms.
It is further alleged The Consumer Law Group “engaged in a scheme to defraud”, even after charging consumers for debt reduction services, by not rendering those services.
You can read the Florida complaint here.
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