Dallas attorney Lloyd Ward who was very involved in the debt settlement business was recently hit with a class action suit in the State of Washington. The suit was filed by The Scott Law Group against Lloyd Ward & Associates, Lloyd Ward PC, The Lloyd Ward Group, Lloyd Ward, Amanda Ward (his wife), Silverleaf Debt Solutions, and Michael Miles.
The suit states the Washington Debt Adjusting Act (“DAA”) and the Washington Consumer Protection Act (“CPA”) are intended to protect Washington consumers but alleges the Defendants “have disregarded these laws and collected criminally unlawful debt adjuster fees from Washington residents.”
“Defendants have utilized a common scheme intended to circumvent the consumer protection laws, in which they advance a pretense that the debt relief services are being performed by an attorney and are thus, Defendants erroneously believe, exempt from the DAA. In truth, however, an attorney does not perform debt-adjusting services.”
The complaint attempts to nail down all the entities and variation of Lloyd Ward enterprises by naming Lloyd Ward & Associates PC, Lloyd Ward PC, and The Lloyd Ward Group and collectively calls them all LWG.
It is asserted that Lloyd Ward partnered with Defendants Michael Miles and Silverleaf Debt Solutions in 2009 “to establish an attorney model debt settlement company designed for the sole purpose of evading state laws prohibiting illegal fee practices.” What makes this suit different is that it drags Ward’s wife, Amanda Ward into the debt settlement quagmire by saying, “Further, Lloyd Ward was acting on behalf of his marital community with Amanda Ward with respect to the misconduct alleged in the Complaint.”
Amanda Ward is said to have served as the Director of Marketing for Lloyd Ward & Associates and had a hand in the solicitation that the Plaintiffs used to begin their participation in this “illegal debt-adjusting program.”
Michael Miles of Silverleaf Debt Solutions is named in the suit as well, which completes and odd circle. You see Ward’s relationship with Miles and Silverleaf are at the heart of a suit filed by the State Bar of Texas against Ward. And on top of that, Ward is suing Michael Miles and Silverleaf Debt Solutions.
The State of Washington statutes state that a debt adjuster may not charge a consumer an initial fee exceeding $25. The also prohibit debt adjusters from charging a total fee that exceeds 15% of the any payment received from consumers in an attempt to prevent fees from being collected through advanced or front loaded fees. Any funds collected from consumers must be distributed to creditors within 40 days of receiving those funds.
The lawsuit alleges the Defendants engaged in illegal, unfair and deceptive business practices in relation to the debt settlement services sold to consumers.
From the suit:
“Defendants’ standardized Client Services Agreement states: “Client has engaged LWG for the sole purpose of negotiating a resolution with said creditors within the Agreement.”
“Defendants’ standardized Agreement required Plaintiffs and Class Members to pay Defendants an up-front “program fee” equal to 15 percent of enrolled debt, as well as a maintenance fee of $45 per month. The agreement also required Plaintiffs and Class members to pay $12.50 per month in connection with a Special Purpose Account.”
“In truth. Defendants are primarily engaged in debt adjusting. Defendants’ debt adjusting activities are not performed by attorneys, not performed by attorneys licensed to practice law in Washington, and are not performed in a manner solely incidental to the practice of law.”
“The debt adjusting services promised to Washington consumers through the standardized Client Retainer Agreement are not performed by, or under the supervision of, an attorney licensed to practice law in Washington, or any attorney.”
“The debt adjusting services described in the standardized Client Retainer Agreement are not performed solely incidental to the practice of law.”
“Defendants owed Plaintiffs and Class members fiduciary duties, including the highest degree of good faith, diligence, and utmost undivided loyalty.”
You can read the actual complaint filed, here.
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