CFPB Sues Debt Relief Attorneys

This week the Consumer Financial Protection Bureau (CFPB) sued the multiple law firms, and attorneys, who charged illegal fees to consumers.  The law firms accepted illegal fees as debt relief agencies.  The lawsuit has been filed in Federal Court and alleges that the law firms, Williamson Law Firm, LLC, Howard Law P.C., and Williamson & Howard, LLP exploited consumers.  The CFPB director Richard Cordray said,

“The defendants exploited consumers who were already suffering financial difficulties by tricking them into paying steep, illegal fees, we put a stop to this scam once already, and we intend to do it again.”

According to rules, generally, debt relief agencies are not allowed to charge a fee until a debt has actually been settled, reduced or the terms of the debt have charged.

The complaint, filed by the CFPB, indicates the law firm’s debt relief program started in 2007, when Vincent Howard and Lawrence Williamson joined Morgan Drexen, Inc.  Vincent Howard moved “Howard Law” into Morgan Drexen’s office and utilized the Morgan Drexen computer platform to develop intake procedures, contracts, and other documents to manage a debt relief program.  According to the complaint, part of the debt relief program included accepting “advance fees” prior to settlement.  Accepting these fees is a violation of Telemarketing Sales Rule under 16 CFR 310.4(a)(5)(i)(a)-(B).  The debt relief agency grew to 100 attorneys and, according to the complaint, collected millions of dollars in unlawful fees.

The suit, filed by the CFPB, asserts the law firms violated statutes in the Consumer Fraud and Abuse Prevention Act, the Telemarketing and Consumer Fraud Rule, and the Consumer Financial Protection Act.  The CFPB is seeking civil penalties, refunds to consumers, court costs, in addition to stopping the lawyer’s debt relief program.

The complaint can be read: http://files.consumerfinance.gov/f/documents/201701_cfpb_Howard-Williamson-complaint.pdf