The CFPB announced that it has obtained a preliminary injunction against World Law Group and its senior leaders for running a debt-relief scheme that charged consumers illegal upfront fees. The alleged scheme “falsely promised consumers a team of attorneys to help negotiate debt settlements with creditors, failed to provide legal representation, and rarely settled consumers’ debt.”
The CFPB alleges that Word Law’s offense include:
- Charging illegal upfront fees: World Law unlawfully kept millions of dollars in illegal fees that consumer paid before being given debt-relief services. These fees include a $199 initial fee that was collected during the first three months, a monthly service fee of $84.95, and a bundled legal service fee ranging from 10-15 percent of the consumers’ outstanding debt. Additionally, the consumers were subjected to collection calls, lawsuits, late fees, and lower credit scores because they were instructed by World Law to stop paying their debts.
- False promises of legal representation: Consumers were promised to have their debts negotiated by local legal representation. A majority of consumers did not communicate with a lawyer and if services were provided, they were provided by non-lawyers.
Additionally, the CFPB has alleged World Law to have taken $67 million from at least 21,000 consumers. The defendants operated through several companies, including Orion Processing, LLC, World Law Processing, WLD Credit Repair, World Law Debt, Family Capital Investment & Management LLC, World Law Debt Services LLC, and World Law Processing, LLC. These companies comingle funds and share functions, employees, and office locations. The United States District Court has halted World Law’s operations while the case is pending.
As always, the attorneys at Lebedin Kofman recommend that any consumer with debt issues should always hire a license attorney instead of one of these “settlement companies.”