While the flood of lawsuits against debt settlement companies has slowed considerably yet one more class action has been added against Meracord, Noteworld, and Fidelity and Deposit Company of Maryland. This time in Arizona.
The complaint provides a very long description of the alleged actions and conspiracy between the debt settlement escrow company and the companies they elected to work with. It also names Meracord’s bonding company directly.
You can read the full suit here but below you will find highlights from it.
Frankly at this point I would not be surprised at all if Meracord wound up filing bankruptcy in the near future with all the liabilities they are fighting.
“Many Americans have suffered—and continue to suffer—extreme financial and emotional hardships as a result of the recent financial crisis dubbed the “Great Recession.” These difficult times have led to the proliferation of highly profitable entities purporting to provide “debt relief” to financially troubled and over-extended consumers struggling to pay their credit card, student loan, and mortgage debts. While there are, no doubt, some companies in the debt relief industry that provide genuine assistance to consumers, there also are countless bad actors who see a consumer in financial distress as just another mark. Meracord, LLC (“Meracord”) formerly known as NoteWorld, LLC, is a perfect example of the latter. To Meracord and its network of co-conspirators, the Great Recession offered not hardship, but windfall profits through exploitation of those experiencing financial distress.
Meracord engages and relies upon a network of “front-end” debt relief companies (“Front DRCs”) that it utilizes to recruit customers. The Front DRCs offer to act as intermediaries between distraught debtors and their creditors, and use inflated claims and misrepresentations about their services to sign up customers, only to charge exorbitant and abusive fees once the mark is on the hook. The Front DRCs require customers to set up an escrow account into which the customer makes a monthly deposit, generally via an automatic electronic funds transfer. These accounts are administered by Meracord, which is a “back-end” debt-relief company. In theory, the Front DRCs will “negotiate” with creditors in order to modify or lower a customer’s debt obligations and subsequently use the funds in the escrow account to pay the creditors on behalf of the customer. In the case of credit card and student loan debts, the Front DRCs promise that once a sufficient balance accumulates in the escrow account, the Front DRCs will approach creditors and utilize the accumulated balance to settle outstanding debts for a lump sum in return for fees that are strictly regulated by law. In the case of mortgage debt, the Front DRCs claim they can negotiate a mortgage modification that will lower the customer’s monthly payments, and that the funds in the escrow account will go toward the new, lower payments. The reality, however, is drastically different from these promises.
The Front DRCs and Meracord represent to consumers that Meracord is independent and unaffiliated with the Front DRCs. The Front DRCs and Meracord further assure consumers that consumers will have control over their money at all times. Linda Remsberg—Meracord’s owner, President, and CEO—calls Meracord “an objective third party processor” on her blog. These statements are false. In fact, Meracord is deeply intertwined with, and actively conspires with, the Front DRCs. For example, Meracord provides software to most of the Front DRCs, through which consumers view their account balances and have the ability to “approve or decline” settlement agreements with their creditors, if any settlement is actually ever reached. This software in many cases represents the bulk of the “services” that the Front DRCs actually provide.
Despite its statements to the contrary, Meracord does not act as an independent fiduciary. Together with its network of Front DRCs, it loots customers’ escrow accounts by withdrawing exorbitant and abusive fees pursuant to contracts that are wholly fraudulent because they are obtained by means of false representations, including (1) guarantees about consumers’ debts being settled for “pennies on the dollar”; (2) that the Front DRCs will be able to modify the terms of consumers’ mortgages even when the lender has previously rejected modification requests; (3) misleading statements about the success rates of the debt-relief services; and (4) assurances that Meracord—the entity that actually withdraws funds from consumers’ accounts— is an “independent” third party. In many cases, the customer must stop making payments to their creditors in order to pay the exorbitant fees charged by the Front DRCs, prompting creditors to initiate lawsuits and foreclosure proceedings. As a result, contracting with the Front DRCs ultimately leaves the customer in a substantially worse position than before the Front DRCs offered to “help.”
If consumers discover the fraud and attempt to retrieve the illegally extracted fees, they often find that the Front DRC is completely unresponsive, or, worse, is nothing more than a shell entity with no real address and no discernible ownership structure. Meracord, for its part, stonewalls customers and refuses to refund illegal fees, hiding behind false claims that it “only” provides “payment processing” services; that it is “not a debt settlement company”; and that it is wholly “independent” from the suddenly unavailable (or vanishing) Front DRC. By the time Meracord actually closes a customer’s escrow account, the customer will have lost thousands, and in some cases tens of thousands, of dollars in unlawful charges.
The “churn” rate in Meracord’s debt-relief payment servicing accounts (canceled accounts as a percentage of active accounts) approaches 70%—a clear and objective indication that the vast majority of its business activity is wholly fraudulent. If Front DRCs were actually performing debt-relief services, the vast majority of their consumers would not cancel their accounts before their debts were renegotiated.
Although Meracord speciously claims that it is not a debt settlement company, the online account management tool that Meracord provides for customers specifically has a section entitled “Settlements,” where customers can “get more details about [pending settlement agreements] and . . . approve or decline the proposed agreement[s].”
Plaintiff Cheryl Anderson’s experience is typical of the harm suffered by victims of Meracord and its co-conspirators. Cheryl was in financial distress and was fraudulently induced to sign up for debt-relief services that she believed would help her to finally dig herself out of debt. As part of its “services,” Meracord withdrew over $7,000 from Cheryl’s bank account, which Cheryl believed would be used to pay her creditors under the more favorable terms supposedly being renegotiated by the Front DRC. After multiple credit-card default judgments were entered against her, Cheryl realized nothing meaningful was being done to renegotiate her debts. She called Meracord and asked for return of her money, but almost nothing was left—Meracord had taken most all of the funds for itself and the Front DRCs. The end result was that Cheryl was thousands of dollars poorer and even more in debt than when she originally sought Defendants’ help.
As a money transmitter and escrow agent, Meracord is required to post a surety bond in Arizona to insure against its liability for wrongful acts committed in the course of its escrow and money transmission business. See A.R.S. §§ 6-814, 6-1205 (West 2013). Arizona allows for consumers to sue directly on the bond if they are injured by the money transmitter and escrow agent’s wrongdoing. Accordingly, Cheryl is entitled to sue directly on the surety bond issued by Meracord based on Meracord’s wrongdoing.”
“Meracord is a Delaware limited liability company with its principal place of business in Tacoma, Washington. According to its Sign-Up Agreement, Meracord “is in the business of providing transaction management and processing services and certain related services as an independent third party,” and its website touts its aim “to be the most respected 3rd party payment service provider in the world, where there is a written promise that dictates the responsible and accurate treatment of the payment.”
Meracord was formerly known as NoteWorld, LLC. After a number of class action lawsuits were filed against NoteWorld, the company changed its name to Meracord. Frequent name changes are a common tactic among bad actors in the debt-relief industry. By changing names, such bad actors are able to wipe clean their online reputations virtually overnight, making it more difficult for consumers to associate the companies with lawsuits and other negative consumer feedback. In this Complaint, Cheryl refers to “Meracord,” although many of the events described herein took place when the company was called “NoteWorld.”
Meracord has conspired and/or currently conspires with dozens (if not hundreds) of Front DRCs who, together with Meracord, comprise the Meracord Enterprise. Those Front DRCs include at least the following entities: 1st Guaranty Mortgage Corp.; 1UC/1st United Consultants/First United Consultants; Accredited Financial Corporation; Amber Network Inc.; American Mortgage Consulting Group LLC; Apply2Save Inc.; Best Debt Options; Beyond Financial Service; Brite Credit Inc. (d/b/a Brite Credit 123); Century Negotiations Inc.; Clear Debt Solution; Coastal Debt Solutions LLC; Consumer Advocates Group Experts LLC; Consumerwise Debt Solutions Inc.; Counsel 4 Debt Relief; Countrywide Debt Solutions Inc.; Credit Care Corporation; CreditCare Pro; Data Med. Capital Inc.; Debt Advocacy Ctr. LLC; Debt Erase Inc.; Debt Help Center USA; Debt National Relief; Debt Reinvestment; Debt Solutions; Debt Source Solutions; DebtPointer Inc.; DebtPro LLC; Dinamica Financiera LLC; Dominant Leads LLC; DTS Financial Group; E.A.C. Financial LLC; EMA Nationwide Inc./EMA/Expense Management America; Expert Settlement Professional; Express Debt Settlement Holdings; FBL Associates; Federal Housing Modification Department Inc.; Federal Loan Modification Law Center LLP; First Rate Debt Solutions; First Universal Lending LLC; Foreclosure Solutions LLC; Freedom Companies Marketing; Freedom Debt Center; Freedom Debt Relief; Freedom Debt Solutions; Freedom Foreclosure Prevention Services LLC; Help Settle LLC; Helpsettle.com; Home Assure LLC; Hope Now Modifications LLC; Infinity Group Services; Innovative Debt Solutions; Kirkland Young LLC; Law Office of Simon & Bocksch; Lifeguard Financial; Lloyd Ward and Associates; Loss Mitigation Services Inc.; LucasLawCenter “Incorporated”; Maximum Debt Solutions; Morgan Stevens Financial Solutions Company; Mortgage Foreclosure Solutions Inc.; National Financial Freedom LLC; National Foreclosure Relief Inc.; National Hometeam Solutions LLC; Nationwide Consumer Advocacy Group; New Hope Prop. LLC; New Life Financial Solutions/New Life Financial/New Life Financial Services; On Track Financial LLC; P&E Solutions; Personal Debt Systems of America; Prime Legal Plans LLC; Princeton Debt Management LLC; Reduce My Debt LLC; Residential Relief Found. Inc.; Safe Harbour Foundation of Florida Inc.; Settle A Debt Inc.; Settlement Corporation of America; SilverLeaf Debt Solutions; The Debt Answer; The Debt Cure; Truman Foreclosure Assistance LLC; U.S. Homeowners Relief Inc.; U.S. Mortgage Funding Inc.; United Credit Adjusters Inc.; United Home Savers LLP; US Consumer Report; US Foreclosure Relief Corp.; Vision Debt.com and World Debt Solutions; and Washington Data Res, Inc.
This is the first listing I’ve seen that name so many of the mortgage modification and foreclosure rescue companies Meracord went on to work with.
Many of these Front DRCs have been the subject of state and federal investigations for consumer fraud. In addition, many of the companies, while maintaining separate legal existences and presenting themselves to consumers as separate entities, are in fact owned and operated by the same individuals.
Meracord acknowledges on its website that it is a “relatively small company” facing “costly challenges.” That is an understatement. Meracord is a defendant in numerous cases around the country, including but not limited to: Rajagopalan v. NoteWorld, No. 3:11-cv-05574 (W.D. Wash., Filed July 26, 2011); Canada v. Meracord, No. 3:12-cv-05657 (W.D. Wash., Filed July 24, 2012); Fritts v. Debt Resolution Ctr., No. CIVMSC12-02292 (Contra Costa Cnty. Superior Ct., Filed Sept. 27, 2012); Knotts v. Meracord, No. 4:13-cv-00358-MGL (D. S.C., Filed Feb. 8, 2013); and Lomax v. Meracord, No. 2:13-cv-01945-SRC-CLW (D. N.J., Filed Feb. 22, 2013). Meracord has also settled at least two cases: Burke v. NoteWorld, No. 1:11-cv-00029-JRH –WLB (S.D. Ga., settled Apr. 18, 2012) and Wheeler v. NoteWorld, No. 2:10-cv-00202-LRS (E.D. Wash., Order Granting Pls.’ Mot. for Preliminary Approval of Class Action Settlement Agreements Filed Sept. 17, 2013). On information and belief, it is unlikely that Meracord alone has the resources to fully compensate Cheryl and class members for the injuries alleged below.
Defendant Fidelity & Deposit Company of Maryland is an insurance company that issues regulatory and contractual surety bonds. It has issued surety bonds for the “use and benefit” of claimants against Meracord in Arizona and other states.”
The complaint alleges the following “enterprise” established by Meracord in the debt relief business. What do you think, is this a fair and accurate view of their activities? Post your comments below.
“In order to vastly grow its customer base, while shielding itself from the scrutiny and complaints of those it defrauds, Meracord partners with an elaborate network of Front DRCs. Meracord uses its Front DRC network to sign up desperate and unsuspecting consumers who are looking for relief from the overwhelming stress of their indebtedness.
Typically, a consumer will sign up with a Front DRC representing itself as a single debt-relief company. Front DRCs seek customers through unsolicited phone calls, email, or mail, as well as internet, television, and radio advertising claiming to offer relief for consumers saddled with overwhelming debt or homeowners struggling to pay their mortgages.
Only later, if ever, does the consumer discover that there are multiple companies involved in the process. The relationships between the various companies are purposely obscured to prevent the consumer from discovering the complicated schemes.
With Meracord’s knowledge and approval, the Front DRCs falsely represent to the consumer that Meracord is an independent, unbiased “payment processing” company. Meracord itself affirms these misrepresentations and uniformly and falsely holds itself out to consumers as “objective” and completely “independent” from its Front DRCs. In actuality, as illustrated below, close relationships exist between Meracord and its network of Front DRCs:
The standardized contracts provided to consumers by the Front DRCs contain, at the very least, an agreement for debt-relief services as well as a Meracord “Sign-Up Agreement,” and often contain a myriad of other confusing forms.
The debt-relief programs described in these agreements universally involve the following material elements:
In addition to charging illegal fees, the contracts used by the Front DRCs, contain false, misleading, and illegal statements. For example, the contracts, along with the claims made by the Front DRCs’ salespeople, often
Moreover, the Front DRCs’ salespeople often pressure consumers into signing (or “esigning”) the contracts quickly, without any meaningful opportunity to review the terms; and the contract terms are often so confusingly worded as to be unintelligible to the average consumer.
Meracord knows that the contracts used by its Front DRCs are fraudulent and illegal, but nevertheless continues to process payments according to the terms of those contracts.
Meracord’s knowledge is self-evident because Meracord:
Front DRCs tout their association with Meracord as proof of their bona fides and to convince consumers that they are legitimate providers of debt-relief services.”
“Meracord perpetuates the fraud by making false and misleading statements of its own through its website, emails and letters to customers, and the Sign-Up Agreements given to customers on behalf of Meracord by the Front DRCs. These statements include false assurances that customers are fully “in control” of their accounts, and that Meracord will not disburse any funds without the customer’s permission, when in fact Meracord and its Front DRCs are in control of the debt settlement accounts, routinely disbursing money to themselves for unearned and illegal fees.
Customers who discover the fraudulent activities of the Meracord Enterprise find themselves fighting an uphill battle and often are unable to disentangle the labyrinthine scheme to identify the party ultimately responsible for the scam. The ephemeral Front DRCs disappear, stop answering phone calls, disclaim responsibility, or resort to outright threats and intimidation.
Meracord also refuses to admit any responsibility for the fraud in which it was complicit. As a result, indebted consumers are left in worse positions than if they had never sought help at all, having often paid thousands of dollars in exorbitant and illegal fees that could have gone toward satisfying their debts.
Meracord profits from the fees generated by each consumer enrolled by the Front DRC members of the Enterprise, knows that the fees are generated by fraudulent and deceptive means, and knows that often the fees charged are flatly illegal.
The Front DRCs in the Meracord Enterprise include entities such as:
The Front DRCs in the Meracord Enterprise profit from the fees generated by fraudulently inducing consumers to sign up for their debt-relief “services” and from their association with the Meracord Enterprise because they use Meracord to legitimize their services and convince consumers that their money will be safe in a Meracord account that only the consumer can control. In addition, because Meracord usually automatically deducts payments from consumers’ bank accounts, the Front DRCs are more likely to reap illicit gains from consumers automatically after signing them up, as opposed to a system where consumers would later—after having reviewed and contemplated the “services” being offered—have to make a separate payment.
In order to evade detection, thwart regulatory actions, and continue to victimize financially distressed consumers, the Front DRCs that are members of the Meracord Enterprise regularly enter into agreements between and among themselves to transfer “portfolios” of victims. For example, in late 2010, one of the Front DRCs involved in Cheryl’s case, “The Debt Answer” faced numerous complaints and regulatory issues, including an investigation by the Connecticut Department of Banking. Instead of complying with the law, The Debt Answer sold its portfolio of 3,407 “active” debt settlement victims’ accounts to Lloyd Ward on January 1, 2011. The Debt Answer itself had apparently earlier purchased an undisclosed number of these victims’ accounts from another Front DRC, Simon & Bocksch.
On information and belief, Meracord facilitates these fraudulent “portfolio” transfers by wiring the unlawful fees to the new entity without any authorization from the consumer account holders, who generally remain unaware that their accounts have been transferred. In fact, on at least several occasions, Meracord account representatives have recommended such transfers upon learning that a Front DRC has encountered legal issues and “is going to be closing the doors.” By facilitating—and in some cases recommending—these wholly fraudulent “portfolio” transfers, Meracord ensures that its steady flow of unlawful fees continues.
Attorney-run Front DRCs have a special role in the Meracord Enterprise. By marketing themselves as law firms, they are perceived by consumers, including Cheryl, as more trustworthy. Moreover, non-attorney Front DRCs often affiliate with an attorney-run Front DRC in an attempt to evade regulations in states that prohibit debt settlement, which often have exceptions for practicing attorneys. Thus, by spuriously affiliating itself with a law firm, a non-attorney Front DRC may extend the period during which it can avoid regulatory scrutiny.
Front DRCs also coordinate and communicate directly with each other through the formation of industry trade associations whose primary purpose is to spread misleading information about the debt-relief industry and to issue bogus “certifications” to Front DRCs. Front DRCs then use these bogus certifications to convince consumers that their activities are legitimate. The following is an actual Frequently Asked Question (FAQ) from the website of one of these bogus trade associations, the United States Organizations for Bankruptcy Alternatives,
“Cheryl’s experience reveals the Meracord Enterprise’s use of unscrupulous Front DRCs to recruit consumers for its fraudulent and unlawful debt-relief services.
Cheryl is a high school English teacher in Tucson, Arizona. In 2010, Cheryl found herself with over $37,000 in credit card debt, which her family had accumulated during a seemingly endless series of unanticipated misfortunes. In the brief span of four years, Cheryl had lost two grandparents, her mother, and both her husband’s parents; Cheryl’s husband was hospitalized after a serious motorcycle accident; and Cheryl had lost her job due to budget cuts and declining enrollment at the private school where she taught. The unexpected costs associated with these events, along with her stepdaughter’s college expenses, had driven Cheryl so far into debt that she was unsure how she would ever recover.
It was under these circumstances that Cheryl saw a television advertisement for The Debt Solution, a company that claimed it could reduce consumers’ debts by negotiating on their behalf with creditors. The ad specifically touted the claim that these “negotiations” would be conducted by attorneys.
Believing that the attorneys at The Debt Solution could help her cope with her overwhelming debt, Cheryl called the number on the ad in April 2010 and was connected to an entity called The Debt Answer (“TDA”). The TDA phone salesperson told Cheryl that TDA had helped “thousands” of people just like her. The salesperson also indicated that with the help of their “legal team,” TDA was able to get bank levies lifted, interest rates “significantly” reduced, and debts settled before lawsuits by creditors occurred.
After speaking with the salesperson, Cheryl received an email from Carl McAfee. McAfee identified himself as a “Senior Debt Analyst,” thanked Cheryl for inquiring about the company’s “debt-elimination programs,” and added: “You will be glad to know that our services are performed by the Law Office of Simon and Bocksch, the leading debt settlement firm in the United States, and [Meracord], a Fully Accredited Member of the BBB for over 25 years!”
Convinced that TDA could help, and reassured by the fact that lawyers would be negotiating with creditors on her behalf, Cheryl agreed to sign up. TDA asked Cheryl to obtain copies of her credit reports and sent Cheryl an email explaining how to do so. Approximately fifty minutes after Cheryl received the credit report email, “Senior Debt Analyst” Kelly McAfee sent her an email with a link to the documentation that Cheryl was requested to electronically sign. Cheryl clicked on the link and e-signed the documents, copies of which were then sent to her via email.
The TDA representative stayed on the phone while Cheryl electronically signed the contracts. The TDA representative told Cheryl that signing the documents would give TDA authorization to set up a trust account with Meracord but did not explain anything else about the contracts. Instead, he rushed Cheryl to sign them so TDA could start helping with her debts.
Cheryl “enrolled” six credit card accounts in the debt-relief program, totaling over $37,500 in debt. The representative promised her that Simon & Bosksch’s negotiations with her creditors could cut that amount in half. He told Cheryl that they had successfully settled thousands of debts.
Within two weeks of contacting TDA, Cheryl received notice that one of her creditors, American Express, had filed a lawsuit against her to collect on her credit card debt. Cheryl had been assured that Simon & Bosksch would be handling interactions and negotiations with her creditors. Indeed, the “Frequently Asked Questions” portion of the “Welcome” packet sent to Cheryl by Simon & Bosksch contains the following: “Q. I just received a summons. What do I do? A. Please fax or email a copy of all documentation that you have received. Once we are in receipt of the paperwork, our attorneys will review it and will contact you within the next 48 hours.” Cheryl immediately notified the law firm about the American Express lawsuit by telephone. She was told to fax a copy of the lawsuit to Simon & Bosksch and she did so the same day. The law firm never said anything else about the lawsuit, but she assumed they were handling it, since she understood them to be acting as her attorneys.
In August 2010, Cheryl received notice that one of her credit card accounts had been settled, and that the settlement would be paid in ten installments from her Meracord account, beginning on August 26. The email she received from Meracord told her she could view the settlement details and disbursement schedule via her “NoteWorld Reporter” account on Meracord’s website.
The following month, on September 13, 2010, Cheryl called Simon & Bosksch to notify the firm that another creditor—Capitol One—had filed suit against her. Simon & Bosksch asked Cheryl to fax them the information, which she did immediately. She also sent Simon & Bosksch a fax asking them to contact the attorneys from American Express. Simon & Bosksch never responded to her regarding the lawsuits.
On September 14, 2010, Cheryl received an email from Simon & Bosksch saying that her account had been transferred to Chad Waclawcxyk in the “Summons Department” at TDA. The same day, she received an email from Waclawcxyk in which he told her that he was in fact with the Law Office of Lloyd Ward and Associates (“Lloyd Ward”).
Waclawcxyk asked Cheryl to forward any creditor collection letters or other correspondence she had received from her creditors, and also asked her to sign a document called “Authorization for Debt Negotiation,” which he said was required “in order to negotiate on [her] behalf.”
Waclawcxyk also sent Cheryl a document called a “Summons Response” form and asked her to complete one for each of her suing creditors (American Express and Capital One), and to send the documents to the court where the lawsuits were pending and to the creditors. The fact that Lloyd Ward was giving her documents to give to the courts only served to further convince Cheryl that Lloyd Ward—like Simon & Bosksch before it—was serving as her attorney in dealing with the creditor lawsuits.
Cheryl returned all of the documents requested by Lloyd Ward on September 20, 2010, and informed the firm that she was mailing the Summons Responses to the court. She never heard back from Lloyd Ward about the lawsuits, and on December 6, 2010, Capital One succeeded in getting a default judgment against Cheryl in the amount of $5,942.89 plus interest.
As of March 21, 2011, the total amount of the judgment was $6,376.76. That judgment then resulted in a lien against Cheryl’s house.
It was two months before Cheryl heard anything from Lloyd Ward again. On November 16, 2010, Lloyd Ward sent Cheryl an email stating only that “notification letters have been sent to your creditors,” without further explanation.
Nearly another two months passed and, on January 7, 2011, Cheryl received an email from Tatiana Paulmeno, a Lloyd Ward employee, indicating that she had completed her “monthly account review” of Cheryl’s account, and asking Cheryl to pay more money into her Meracord account.
Lloyd Ward subsequently sent Cheryl an email on February 16, 2011, informing her that her escrow account would now be handled not by Meracord, but by Global Client Solutions (“GCS”). Cheryl’s account was transferred to GCS sometime in late March or early April 2011.
On May 25, 2011, over a year since Cheryl signed up for the “debt settlement” program and nine months since she had heard anything about any settlements or even potential settlements with her creditors, Cheryl had heard nothing from the firm(s) she believed to be acting as her attorneys about the status of the creditor lawsuits against her. Furthermore, she was continuing to receive correspondence from Capital One’s lawyers asking why they had not heard from her and informing her that there had been a lien placed on her house. Cheryl emailed Lloyd Ward about these concerns, and nearly a week later received an email from yet another Lloyd Ward employee, Vallery Mann, asking Cheryl to call her.
Cheryl attempted to return Ms. Mann’s call. She was told that Ms. Mann was not available and her messages were never returned.
On June 1, 2011, Cheryl called Lloyd Ward and cancelled her account. In July, she closed her bank account to stop the withdrawals.
Cheryl “enrolled” six credit card accounts with three different creditors in the “Debt Solutions” program, totaling over $37,500 in debt. Of those accounts, only one was settled on her behalf. That account had a balance of $7,118.68 when she enrolled it in the program, leaving over $30,000 of her debts that were never settled. In addition, two of the three creditors had filed debt collection lawsuits against her, and one creditor obtained judgments against her that resulted in liens against her home.
Between April 2010 and April 2011, Meracord withdrew twelve monthly payments of $474.93, for a total of $7,123.95. Of that amount, $2,533.00 was used to pay the one settlement achieved. When her escrow account was transferred from Meracord to GCS, it contained $174.65, leaving $3,641.16 that ostensibly went to pay “fees” to Meracord and the various entities that served as the Front DRCs. None of those fees were ever returned to Cheryl, despite the fact that she never received the benefits promised as a part of the program.
When, in desperation, Cheryl sought help to deal with her mounting debt load, she was relieved to find a company that claimed to use attorneys in order to negotiate settlements that would drastically reduce her debts. Instead of the one company she thought she was hiring to help her, however, Cheryl found a confounding array of debt settlement companies who took thousands of dollars from her, promising to settle her debts, and instead left her in a far worse position than when she started.”
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