North Carolina court enters $35 million judgment against illegal debt relief companies

North Carolina AG debt reliefOn March 9, 2017, the North Carolina Attorney General (AG) issued a press release announcing that a North Carolina Superior Court had issued a ruling against three debt relief companies. The court permanently banning the companies from advertising or performing any debt relief services, legal services or any related services in North Carolina and entered final judgments and assessed civil penalties.

On June 25, 2014, the North Carolina AG and the North Carolina State Bar filed a complaint against Orion Processing, Swift Rock Financial, and World Law South. The companies all did business under the name “World Law.” According to the complaint, since 2010 World Law had collected more than $8.5 million from over 1,400 consumers in connection with an illegal debt relief scheme.

The complaint alleged that World Law used deceptive and misleading representations to target consumers who have large amounts of credit card debt and offered to negotiate on their behalf to reduce their debts through settlement. World Law claimed that their program would help consumers pay off their credit card debts, save large amounts of money and leave them debt-free without bankruptcy. In reality, World Law rarely achieved such results for consumers who entered their program. According to the complaint, World law was operating a “classic advance fee scam designed to extract exorbitant upfront fees from vulnerable consumers.”

In addition, World Law advertised that it was a law firm and that local attorneys would represent consumers if they were sued by their creditors. The complaint alleged that World Law was not a law firm, did not have attorneys, nor did it assist consumers in finding representation.

As a result of the litigation and settlement, the AG secured a total of $6.6 million in consumer relief, and $30 million in civil penalties. Under an earlier court order in the case, consumers received refunds of more than $3.5 million.

In August 2015, the CFPB filed a complaint against World Law for charging illegal upfront fees to consumers in violation of the Telemarketing Sales Rule. According to the CFPB, World Law and its affiliates allegedly misled more than 20,000 consumers into believing the firm would provide specialized legal consultation to settle or mitigate debt. In July 2016, the CFPB agreed to a $107 million suspended settlement with the World Law Group.

Tags: Debt Relief, State AGs

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