Mon July 9, 2012
'Debt resolution' firm agrees to $2.1 million restitution
Legal Helpers Debt Resolution LLC will provide $2.1 million in restitution for Illinois residents who paid for debt settlement services but failed to receive meaningful debt reduction under a settlement with Illinois Atty. Gen. Lisa Madigan and the Illinois Department of Financial and Professional Regulation.
The Chicago-based law firm, which operates nationwide, allegedly charged consumers upfront fees to provide debt settlement services with promises to make them debt free.
“This company was fronting as a law firm claiming to help consumers reduce their debt, but in reality, their scheme had nothing to do with the practice of law,” Madigan said. “The company’s primary purpose was to squeeze thousands of dollars in illegal upfront fees from struggling families for supposed debt relief that never materialized.”
Also under the settlement, which was entered in Sangamon County Circuit Court, the company has agreed not to accept any new Illinois customers.
Madigan filed a lawsuit against the firm in March 2011, alleging the operation attempted to circumvent laws that ban companies from charging upfront fees by using attorneys to act as a front for the business. The lawsuit alleged that the company’s services seldom reduced consumers’ debt and most consumers were left in a worse financial state.
The DFPR joined the lawsuit in September 2011 after the company failed to respond to the department’s cease-and-desist order for not obtaining proper licensing.
On June 5, 2012, the Attorney Registration and Disciplinary Commission filed a disciplinary action against two Legal Helpers managing members alleging misconduct in connection with their debt settlement business.
Illinois consumers who believe they are owed a refund under the settlement should contact Madigan’s Consumer Fraud Bureau at 1-800-243-0618.