World Law Debt, Meet Oregon

World Law Debt might want to read the tea leaves facing them from recent actions by North Carolina and now Oregon.

On July 1, 2013 the Oregon Department of Justice and Department of Consumer and Business Services sued Swift Rock Financial, Wold Law Debt, World law Direct, World Law Group, World law Plan, World law Debt Settlement, World Law Debt Services, World law Options, World Law Debt Assistance, Orion Processing, World Law Processing, and WLD Credit Repair.

According to the State of Oregon, the two agencies on Monday sued World Law Debt accusing the Texas debt settlement company of multiple violations of Oregon’s Unlawful Trade Practices Act, including charging excessive fees and claiming inaccurately that it had Oregon attorneys on staff handling client cases. The complaint also alleged the company financially abused its customers 65 years old and older.

The lawsuit alleges that of the $1.5 million World Law Debt collected from Oregon clients it actually paid just $275,211 to their creditors and retained more than $960,000 in fees. The state obtained a temporary restraining order Tuesday prohibiting World Law Debt and its affiliates from doing business in Oregon. It will seek a longer-term ban later this month.

Screen Shot 2013-07-05 at 11.11.45 AMWorld Law Debt came to Oregon in 2009 offering to help debt-burdened Oregonians negotiate with their creditors, work out a payment plan and actually lower the amount they owed, according to the complaint, filed Monday in Multnomah County Circuit Court. World Law Debt’s Oregon customers authorized the company to take monthly withdrawals from their bank accounts, according to the complaint. These withdrawals were used to establish savings accounts for individual customers. When the consumer has saved enough, World Law claimed it would contact the creditors and negotiate a lump-sum payment or payment plan.

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In response to consumer complaints, Oregon lawmakers enacted new restrictions on the debt settlement industry in 2009, limiting the fees they charge and requiring they register with the Department of Consumer and Business Services. The department fined World Law Debt $70,000 last September for failing to register before doing business in Oregon and other violations of the law.

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World Law Debt has not paid the fine, remains unregistered and has continued to operate, signing up at least a hundred new Oregon clients since it got fined, according to the lawsuit.

The Department of Justice is seeking more than $10 million in civil penalties, $25,000 for each of the 425 contracts the company entered into with Oregonians while it was not properly registered. The state is also demanding World Law Debt fully refund its Oregon customers. – Source

According to the complaint filed, World Law used Global Client Solutions to collect and process payments from consumers. What is interesting is it appears to be data from Global Client Solutions that helped the State of Oregon to bring this new action and restraining order.

According to records created by Global, from June 26, 2009 to April 16, 2013, 306 Oregon residents have paid approximately $1,588,698 into Defendants’ debt settlement program. Of that amount, approximately $275,211 in settlement payments has been made to creditors. Defendants have collected approximately $960,226 in various fees. Clients who have closed their accounts have received refunds totaling approximately $67,786.

The conduct alleged in the preceding paragraphs was willful, in that Defendants knew or should have known that their conduct violated the UTPA. ORS 646.60(510). – Source

And World Law allegedly continued to enroll consumers in Oregon even though they knew they had been directed not to.

On or about May 30, 2012, the Director of DCBS served a proposed order on Defendants (then known to the Director as “World Law Group dba World Law Plan” ) advising them they were required to registered as debt management service providers, and that he intended to issue an order requiring them to cease all debt management service provider activity in Oregon and imposing a civil penalty of $70,000 against Defendants for alleged violations of ORS 697.602 to 697.842. On or about September 26, 2012, the Director of DCBS issued a final order against Defendants that was materially identical to the May 30, 2012 proposed order.

Since the final order was issued, Defendants have continued to solicit Oregon residents; have entered into at least 100 new agreements with Oregon residents, with the most recent agreement known to Plaintiff having been made on or about April 16, 2013; have continued to negotiate on behalf of Oregon residents to lower their credit card debt; and, have continued to collect tens of thousands of dollars in fees from Oregon residents. Defendants have also failed to pay the $70,000 civil penalty assessed by the Director of DCBS.

For those interested, you can read the full complaint filed, here.

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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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