Get Out of Debt Guy - Steve Rhode

And Oh How They Fall: Advanced Fee Attorney Model Debt Settlement Companies

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Yesterday I posted an update about how World Law, World Law Debt, World Law Group, or whoever they were at the moment; is being liquidated. You can read the details here.

The latest closure of the advanced fee debt settlement company by regulators, legal action, or the courts has to make some think the model is doomed to fail and based on the collective thousands of pages of public record, was never a good model for consumers.

In the past five or so years there were some big players in the Morgan Drexen – shuttered, World Law – Shuttered, and Legal Helpers Debt Resolution – shuttered. And remember back not so long ago when some inside the debt relief industry were fighting there was nothing wrong with the model?

From World Law court documents, “Oregon asserts that Orion operates under various “World Law” entities to target vulnerable consumers who are in financial trouble as a result, mostly, of credit card debt. Orion tells consumers that it is a law firm and that it will provide local licensed attorneys to resolve consumers’ unsecured credit card debts. In reality, Orion employs no local attorneys and charges consumers illegal upfront fees for substandard debt negotiation services. Orion also charges illegal upfront fees before any debts are settled.” – Source

From the Consumer Financial Protection Bureau about Morgan Drexen, “In 2013, we sued debt settlement company Morgan Drexen for collecting illegal “upfront fees” for debt settlement services and for running deceptive advertisements. We prevailed in our lawsuit: in April 2015, a federal court ruled against Morgan Drexen and found that the company misled the court and falsified evidence during the lawsuit. The court later ruled that Morgan Drexen must stop collecting money from its customers. Morgan Drexen went out of business in late June 2015 after filing for bankruptcy.” – Source

From attorney action against lawyers involved with Legal Helpers Debt Resolution, “Respondents placed more importance on their own success and financial gain than they did on their clients’ interests. The Panel heard no expressions of remorse for the harm their clients suffered. Additionally, in the opinion of this Panel, Respondents did not sufficiently contemplate the ethical problems that LHDR’s model and operations caused and ultimately did not acknowledge the gravity of these problems.” – Source

What does this string of company closures indicate to you?


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