AG's office reaches settlement with debt company
CHARLESTON — Attorney General Patrick Morrisey has announced a settlement with Illinois-based Legal Helpers Debt Resolution LLC prohibiting the company from engaging in future debt negotiating or modification services in West Virginia.
The settlement also stipulates that Legal Helpers will pay the state $135,000. Of that, $50,000 will be used for consumer restitution.
“This settlement sends a message to those who think they don’t have to follow the law that this kind of behavior will not be tolerated,” Morrisey said in a press release. “Our Consumer Protection Division knows of at least 400 people who paid Legal Helpers a fee believing that the company would use every legal tool available to help them get out of debt.
"However the company provided little assistance to consumers while reaping thousands of dollars in fees.”
In December, Morrisey filed a lawsuit in Kanawha Circuit Court alleging Legal Helpers violated state consumer protection laws by misrepresenting that its lawyers could provide debt relief services in the state when, in fact, they did not.
The Attorney General’s Office believes more than 400 West Virginia consumers enrolled with the company and paid advance fees to help resolve their debt, only to not have the debt paid.
The lawsuit claimed that consumers who enrolled with Legal Helpers were instructed to stop paying creditors and told instead to open a new dedicated account with a third-party vendor. Consumers then made monthly payments to the third-party vendor instead of the creditor. Legal Helpers and their third-party vendors paid themselves from the dedicated account.
The lawsuit alleged Legal Helpers failed to clearly and conspicuously disclose that it would not provide debt relief services to consumers, including negotiation and debt settlement, until all of its fees have been paid.
Legal Helpers and its principal owners Thomas Macey, Jeffrey Aleman, and Jason Searns, as well as former partner, Jeffrey Hyslip, denied any wrongdoing in the settlement.
The settlement says those owners may engage in the practice of law in West Virginia as long as they become licensed in the State, or are admitted to practice before a court for a particular matter.
“Debt settlement is one form of debt relief that may work for some people. But when lawyers claim they are going to provide the services, they ought to provide the services or closely supervise those who do,” Morrisey added.
Consumers who believe they have been scammed by a debt relief business are asked to contact the Attorney General’s Consumer Protection Division at 800-368-8808. Complaint forms also may be found online at www.wvago.gov.