Wisconsin Sues Chicago Debt Firm, Alleges Illegal Fee Collection

June 17, 2013
Milwaukee Journal Sentinel (WI) 

Several Wisconsin state agencies are suing Legal Helpers Debt Resolution, alleging that the Chicago-based firm illegally collected millions of dollars in fees from Wisconsin consumers seeking debt relief. Prosecutors say Legal Helpers portrayed itself as a law firm when it really operated a debt settlement service, enrolling about 1,900 Wisconsin consumers. The outfit charged clients illegal upfront fees of $500 to $900 as well as monthly fees of $50 to $75, although the customers received few, if any results, according to the Wisconsin attorney general's office. To operate a debt resolution or debt settlement service in Wisconsin, a company must obtain an adjustment service license from the state, which Legal Helpers never had. The debt resolution services were provided by third parties who were not attorneys or properly licensed. The complaint says that state agencies -- including the Department of Agriculture, Trade and Consumer Protection and the Department of Financial Institutions -- fielded more than 70 consumer grievances about Legal Helpers in the past three years. Many complaints said that Legal Helpers had promised to get in touch with creditors to stop or reduce the number of calls,but regularly misplaced documents and failed to consult with creditors in a timely manner. The firm also instructed clients to stop making minimum payments to creditors, causing them to rack up more fees and additional interest on outstanding balances. The state is seeking penalties of up to $10,000 per violation, possible imprisonment for the defendants, and restitution to consumers.
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