Debt-Relief Firm Accused of Bilking 21,000 Consumers

Photo (cc) by quaziefoto

The Consumer Financial Protection Bureau has shut down a law firm that allegedly ran a debt-relief scheme that cheated consumers out of $67 million.

The federal agency is suing World Law Group for allegedly making false promises and illegally charging consumers exorbitant upfront fees to negotiate debt settlements with creditors.

The firm allegedly collected more than $67 million from at least 21,000 consumers before it provided any work on their behalf, including a $199 initial fee, an $84.95 monthly fee for attorney services and a “bundled legal service fee” which ranged from 10 percent to 15 percent of the consumers’ outstanding debt balance.

The CFPB claims that World Law didn’t deliver the promised team of attorneys to negotiate debt settlements, failed to provide consumers with legal representation and seldom settled consumers’ debts.

“We took action today against World Law Group for an alleged debt relief scheme that lured consumers with false promises of help from lawyers and collected millions in illegal upfront fees,” CFPB Director Richard Cordray said in a statement. “We are seeking to put an end to this scheme and prevent more consumers from being harmed.”

World Law has been forced to cease operation and its assets have been frozen while the case is pending.

World Law allegedly directed consumers to make a single monthly payment to the group to work on settling their debts instead of paying their creditors. According to the complaint:

World Law unlawfully kept many of these payments as fees before providing debt-relief services. As a result, consumers paid millions of dollars in illegal fees and suffered additional harms, including being subjected to collection calls, lawsuits, late fees, and lower credit scores.

The CFPB’s lawsuit said Derin Scott, David Klein, and Bradley James Haskins of World Law Group operated the debt-relief scheme through an interconnected network of companies, including: Orion Processing, World Law Processing, WLD Credit Repair, World Law Debt, Family Capital Investment & Management, World Law Debt Services and World Law Processing.

Have you ever sought out debt-relief services? Share your experiences below or on our Facebook page.

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