Law firm to pay $2M for stiffing debt consumers
ALLISON HORTON Staff Reporter July 9, 2012 3:42PM
A Chicago-based law firm must pay $2.1 million in a settlement with the state for unlawfully charging consumers upfront fees to provide debt settlement services with promises of making clients debt free.
Legal Helpers Debt Resolution agreed Monday to reimburse Illinois residents who paid for debt settlement services but did not receive significant debt reduction, according to the Attorney General’s office.
The nationwide firm also agreed not to accept any new Illinois customers under the settlement entered in Sangamon County Circuit Court, the release said.
Madigan filed the suit in March 2011, alleging the law firm unlawfully charged upfront fees to consumers in Bureau, Champaign, Kendall, Will and Cook counties. The Department of Financial and Professional Regulation joined the suit as a co-plaintiff in September 2011.
The firm allegedly went around laws that ban upfront fees by using attorneys, which are sometimes exempt from the ban, to act as a front, according to the suit. The company’s services seldom reduced debt and most consumers were left in a worse financial state.
“This company was fronting as a law firm claiming to help consumers reduce their debt, but in reality, their scheme had nothing to do with the practice of law,” Attorney General Lisa Madigan said in the release. “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.”
Illinois consumers who believe they are owed a refund should call (800) 243-0618.