CHARLESTON -- Florida attorneys employed by Hess Kennedy Company Chartered have been temporarily forbidden from settling consumers' debts until they comply with an investigation under way by Attorney General Darrell McGraw.

That is a result of an order signed Dec. 14 in Kanawha Circuit Court.

Hess Kennedy, based in Coral Springs, claims to assist consumers who are struggling financially to make payments to their creditors. This increasingly common, and sometimes controversial business of debt settlement has arisen as consumer credit card debt has ballooned in the past few years. Debt settlers such as Hess Kennedy make repayment plans to help consumers repay outstanding debts, at a deep discount, to avoid being sued or filing for bankruptcy. Monthly payments are then made by consumers to the debt settlers in turn for which the debt settlers claim to negotiate with creditors to reduce the amount of debt owed.

Although debt settlement services are unrestricted in some states, West Virginia's law regarding debt settlement only permits for-profit companies to charge a monthly service fee of 2 percent of the payments made by consumers. Although Attorney General McGraw's investigation is incomplete, it appears that Hess Kennedy was charging more than the 2 percent fee allowed by state law.

"Although the debt settlement approach to debt relief may work for some persons, the service has legal consequences and should only be offered by persons licensed to practice law in West Virginia," McGraw said in a press release. "My office will continue to scrutinize the debt relief industry in an effort to protect consumers who are already facing dire financial circumstances from paying excessive fees for services that may leave them in worse shape than before."

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