Well I would be surpprised if this latest court filing by the Consumer Financial Protection Bureau (CFPB) didn’t put the final nail in the World Law advance fee attorney model debt settlement mess.
The CFPB asked the court for a judgment of nearly $150 million. Out of that $106,813,049 is for the purpose of refunding consumers. I seriously doubt they will recover anywhere near that amount.
And so marks the end for another Morgan Drexenish attempt to circumvent the Telemarketing Sales Rule (TSR) and charge big administrative or advance fees for debt settlement services. Goodbye World Law, World Law Debt, Orion Processing, World law Processing, WLD Credit Repair, Family Capital Investment & Management, FCIAM, FCIAM Property Management, World Law Debt Services, Derin Scott, David Klein, Bradly Haskins, World Law Group America, WLD Price Global, World Law Forms and Medication, and World Law South.
The CFPB said…
“This scheme targeted financially-distressed consumers who were struggling to pay their bills, and Defendants ultimately bilked these consumers out of over $100 million. These consumers were often left even deeper in debt. Many were sued by their creditors, but were not provided with the legal representation they had been promised. Finally, Default Defendants have a history of law violations; over the past several years, the World Law debt relief operation has been the subject of a series of enforcement actions by state Attorneys General.
Accordingly, based on Default Defendants blatant violations of federal law, their bad faith conduct, and the significant consumer harm resulting from their illegal activity, the Bureau submits that a civil penalty of at least $40 million is appropriate. See CFPB v. Morgan Drexen, Inc., et al., No. 8:13-cv-01267 (C.D. Cal. March 16, 2016) (awarding $40 million civil penalty for debt relief scheme that violated the CFPA and the TSR) (attached as Exhibit 4); Harper, Ex. 2 (awarding $10 million civil penalty in a default judgment against corporate defendants for violations of the CFPA and other consumer protection laws) (attached as Exhibit 2); Jalan, Ex. 3 (awarding civil penalty in a default judgment against a corporation and two individual defendants for violations of consumer protection laws) (attached as Exhibit 3).”
“Default Defendants have acted in bad faith by attempting to evade the TSR’s ban on upfront fees for debt relief services, using deceptive claims of “legal representation” in a failed attempt to circumvent the law. Defendants, including Default Defendants, attempted to avoid accountability by operating through a network of shell businesses and using a variety of bank accounts, routinely commingling funds and dissipating assets.”
“The gravity of this scheme was tremendous. Default Defendants violated the TSR’s ban on upfront fees for debt relief services for years, a practice the Federal Trade Commission concluded was so abusive and harmful to consumers that it warranted an outright ban. Defendants also falsely promised legal representation, specifically promising consumers a local lawyer to negotiate and settle consumers’ debts and to represent consumers if they were sued. This scheme targeted financially-distressed consumers who were struggling to pay their bills, and Defendants ultimately bilked these consumers out of over $100 million. These consumers were often left even deeper in debt. Many were sued by their creditors, but were not provided with the legal representation they had been promised. Finally, Default Defendants have a history of law violations; over the past several years, the World Law debt relief operation has been the subject of a series of enforcement actions by state Attorneys General.”
You can read the source document below.
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Proposed Default Judgment
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It appears Global Client Solutions assisted World Law to debit illegal fees from consumers. Read the declaration of Timothy Hanson below.
“During the course of the investigation, I analyzed the transaction records maintained by Global Client Solutions, LLC (“GCS”). GCS provides account maintenance and payment processing services to debt relief service providers and consumers who are enrolled in debt settlement programs. GCS maintains dedicated accounts (also known as special purpose accounts) that allow consumers to save funds to pay off their debts. GCS tracks every consumer transaction for each account including, for example, deposits from the consumers, disbursements of fees to the debt settlement company or payment processors, as well as payments to creditors. The GCS transactions records identify World Law Debt, World Law Debt-EFA Processing, and World Law Debt-REGDEV (collectively, “World Law Consumer Accounts”) as companies that enrolled consumers in debt settlement programs and received fees from the consumer accounts.”
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