NC Attorney General Sues Debt-Settlement Firm That Collected More Than $1.1 Million

May 16, 2014
Raleigh News & Observer (North Carolina) 
North Carolina Attorney General Roy Cooper has sued Chicago-based Legal Helpers Debt Resolution (LHDR), alleging that it ran an illegal scheme that swindled 412 state residents out of more than $1.1 million during a two-year period.

The company allegedly collected illegal advance fees for debt-settlement services that were never provided as marketed. The suit argues that LHDR advertised on the radio, online, and via mass mailings, vowing to have customers debt-free within four years. Claiming to be a national law firm, it pledged to assign an attorney to work with clients throughout the process. The lawsuit seeks to ban LHDR from conducting business in North Carolina and to require it to refund state residents.

Through this “classic advance fee scam,” as the lawsuit described it, the company took in more than $1.5 million from North Carolina residents and used only 15 percent of those funds to pay off customer debt. One victim was a Durham resident who paid LHDR about $2,500 to help her resolve $22,000 in credit card debt. The services were never rendered, and the company issued a $90 refund.

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