The truth is finally out about companies who claim to be a law firm and offer debt relief services to people desperate for help. On Monday July 9th the Illinois Attorney General along with the Illinois Department of Financial and Professional Regulation announced its settlement with Legal Helpers Debt Resolution LLC. According to the suit brought against the law firm by Lisa Madigan, which was filed in March 2011, the law firm unlawfully charged its clients upfront fees to provide debt settlement services with promises to rid them of their debt.
As a part of this settlement, LHDR will provide over two million dollars in restitutions which will go toward the Illinois residents who pair the firm for their debt resolution services but failed to receive the services they were promised. In addition the firm has agreed not to take on any new clients in Illinois.
The truth is, this company, like many others out there, gave the appearance that their clients were receiving legal services when in fact what they were offering had nothing to do with the practice of law. According to the Attorney General, “The Company’s primary purpose was to squeeze thousands of dollars in illegal upfront fees from struggling families for supposed debt relief that never materialized”
Unfortunately, ever since the Federal Trade Commission published their regulations regarding debt settlement and the matter of charging upfront fees in October 2010, many debt relief companies looked to find other ways to get around this ruling. This resulted in companies partnering with so called law firms to offer what they called “legal services” and charging their clients monthly upfront fees for these services.
This recent court settlement goes to prove that these companies are not providing the legal services that they make their clients believe. As the suit alleges, the use of attorney’s was nothing more than an attempt to circumvent laws that ban companies from charging upfront fees. It’s goal was to use the attorney to act as a front for the company in the hopes it would fall under the exception clause in the resolution.
If you are in need of debt relief, make sure you do your research and know the facts. Ask the company if they charge their fees upfront. A reputable company will not only charge their fees once a settlement has been reached, but will go a step further and base their fees on their performance. If a company if claiming to offer legal services or legal protection, ask exactly what they cover. Ensure you ask if they will represent you in court at no extra charge, and if they will protect your rights under the FDCPA with no out of pocket expenses to you.
You will find most if not all of the law firm based companies will not actually represent you or provide any legal services except to “assist” you in writing a response. This means you are paying typically a large retainer and monthly service fees for something you could find on the internet for free.
The Pay as you settle program, or PAYS, has been operating under one simple idea for several years. Provide debt reduction services not promises. Since its inception, it has, as the saying goes, “put its money where its mouth is” by not charging any of its fees until the settlement has been reached, and basing that fee on the savings. This means you get exactly what you pay for and the company has an incentive to do the very best for you.