Rhode Island Warns Consumers About Debt Management Companies

A story out of Rhode Island from WPRI News warns consumers about debt management companies that use local attorneys to help represent consumers in their programs.

The Rhode Island Attorney General refers to the practice of being assigned a local attorney from a national debt relief company, as “ghost writing.”

“”It started to get really odd when I was served by one of my credit cards to go to court,” she says. “And I called the lawyer to say, ok, what do I do?”

What followed next for Amy is what the Attorney General has a problem with. The national company helping Amy manage her debt referred her to a local attorney to act as a coach, prepping her to go to court to represent herself. But Amy, like hundreds of other consumers, never actually met her attorney.

“I was very scared,” she says. “I had never been to court before and he advised me that he would tell me what to say, but he couldn’t come with me.”

“It’s not specific, it’s generic,” says Peter Kilmartin, Rhode Island’s Attorney General of the process. “And they really don’t have any attorney/client relationship with the person who is getting sued who has the debt.”

It’s a practice known as “ghost writing.” And Kilmartin and other consumer advocates believe it shouldn’t be allowed.” – Source

This issue of having a local attorney appointed to typically debt settlement clients is problematic. In recent years some states have taken great exception to the practice and feel that if the local attorney does not have a traditional attorney client relationship then there is no relationship that would exempt the local attorney from stringent debt relief guidelines under the FTC Telemarketing Sales Rules.

I can easily see more states passing rules or legislation specifically on this subject and limiting or eliminating it.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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