Government Sues Morgan Drexen Debt Settlement Company» Print This Page
- August 29, 2013
Just last week, the Consumer Financial Protection Bureau (CFPB) of the federal government filed a lawsuit against Morgan Drexen, a debt settlement company, and its owner, Walter Ledda. The CFPB accused them of engaging in deceptive practices and charging consumers illegal fees. The government’s press release notes “The company falsely claims that it does not charge consumers upfront fees for debt-relief services and falsely represents to consumers that they will become debt free in months if they work with Morgan Drexen”.
The lawsuit against the defendants charges them with violating at least 2 federal acts, the Telemarketing Sales Rule and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Those acts include a general prohibition against a debt settlement company charging a consumer for fees unless it has actually obtained a benefit for the consumer. The government believes the defendants violated this prohibition by having consumers sign not only a debt settlement contract, but also a bankruptcy contract under which the defendants performed little or no work. The government also stated that the defendants engaged in deceptive and misleading advertising by falsely claiming that it did not charge up-front fees and that consumers would be debt free in just a few months.
We have had several clients who had previously tried working with debt settlement companies. Not one of our clients was actually satisfied with those companies, some of whom were paid thousands of dollars with little to no benefit to our clients. In some cases, hiring a debt settlement company has actually prompted lawsuits against them, as a result of the debt settlement company stopping payments to the consumer’s credit card companies. Don’t let these types of debt settlement companies take advantage of you.Share This