Class action lawsuit filed against one of the largest debt settlement law firms.

 

Legal helpers debt resolution LLC has been named in a class action lawsuit filed in New Jersey. This is just one in a string of recent lawsuits against attorney based debt settlement companies.

The suit alleges;

"The defendants have created a plan or scheme to defraud the residents of the State of New Jersey and other states by performing unlawful debt adjustment activities and engaging in the unauthorized practice of law in the State of New Jersey.

The law firm of Legal Helpers Debt Resolution, L.L.C. and its individual members, recruits, employs and partners with both front-end lead generators and back-end service companies, financial institutions and other attorneys in New Jersey and other states to provide debt adjustment services creating the impression that these services are to be performed or provided by attorneys.

In fact, these services are not performed by, nor were they ever intended to be performed by, attorneys. 

This unlawful plan or scheme is in violation of the New Jersey Debt Adjustment and Credit Counseling Act, N.J.S.A. 17:16G-1, et seq. since these services are performed by forprofit entities or persons not permitted to operate such business in New Jersey under the Act. Such debt adjustment activity further constitutes the unauthorized practice of law in the State of New Jersey.

Both violations constitute crimes under New Jersey law and are in violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1, et seq., the New Jersey Racketeer Influenced and Corrupt Organizations Act, N.J.S.A. 2C:41-1, et seq., and other State laws. Plaintiffs seek recovery of monies paid to the defendants and injunctive relief enjoining and restraining the defendants from doing business in New Jersey or with New Jersey residents."

According to the suit LHDR advertises to it's potential clients that it is the nation's largest debt resolution law firm and has partners in 50 states. The suit goes on to say that LHDR gives the impression that when potential clients contact LHDR, its attorneys review the customer's current financial situation and tailor a debt resolution plan that is unique to their situation.

It goes on to say that LHDR tells it's potential clients that it will immediately contacts customers' creditors to inform them to contact LHDR as the customers' law firm regarding all issues of the customers' debt. Additionally, LHDR has attorneys on staff to protect customers from any harassing debt collectors.

The document states that LHDR makes clients feel as if they are a security blanket and will handle all of the clients' debt resolution issues, including contacting all of their unsecured debt creditors informing them that they should direct all communications to the law firm. Also that LHDR will protect the clients rights under the FDCPA and will fight for their rights.

It is alleged that the plaintiff in the case was enrolled into the Legal Helpers Debt Resolution program. They were sent a Power of Attorney which authorize LHDR to act as the plaintiff's limited financial advisor and to represent the plaintiff for the purposes of negotiating their debt. 

The plaintiff claims that they continued to receive communications from the creditors both in writing as well as over the phone. plaintiff states that they sent records of this to LHDR however never got communications back from them.

The complaint states that plaintiff received a letter from an attorney representing Target National Bank, which plaintiff forwarded to LHDR. LHDR sent plaintiff a response stating that, they should send a provided FDCPA validation letter, which was included in the welcome package plaintiff received from LHDR.

In response the attorney for Target sued the plaintiff. plaintiff sent the summons and all communications from Target's attorney to LHDR. It is stated that LHDR did not contact the client until approximately 8 months later and received a letter stating that;

 the client did not and has not paid LHDR to answer the lawsuit, but rather to manage and settle debts.

After this point the plaintiff was sued and received judgements from several other creditors of which LHDR did nothing about.

If you would like to read all 47 pages of the suit click the below link;

class_action_complaint.pdf 

The Illinois Attorney General has also filed suit against LHDR

The Law suit alledges that using a debt settlement attorney is no better than the service provided by a non-law-firm settlement company.

According to the suit, LHDR has engaged in acts and practices that violate Illinois Law and that LHDR contracts out virtually all of it's debt relief services to non attorney run and operated companies.

It goes on to say that LHDR falsely claims that it's services using a law firm is superior to other debt settlement services. They also say in the suit that LHDR makes claims that a law firm will be handling the consumer's debt resolution but this is not true. Once a customer signs up with LHDR all debt resolution services are provided by a third party.

The suit alleges that customers who sign up report that they have never had contact by an attorney from the firm.

Click link below to view the full suit.

 FILED-COMPLAINT-2011CH00286-LEGAL-HELPERS_03-02-2011_08-51-32.pdf