November 28th, 2012 | Andrea Damewood News | Posted In: Cops and Courts, PDX News

Debt Company Illegally Charged $2.49 Million to Oregon Residents, Suit Says

lede_1_debt_3822ILLUSTRATION: Will Bryant

A “debt resolution” company that’s taken $2.49 million in fees from 540 Oregon residents is being sued by the state for what it says are acts of financial abuse of vulnerable people.

The company, Legal Helpers Debt Resolution, provides what many daytime television ads promise: It gives a “financial workout” to consumers—negotiating debt with creditors on a client’s behalf, and then sets up a plan for repayment, according to its website.

However, the state says in its suit—filed Tuesday in Multnomah County Circuit Court—that the company also often charges high fees without getting clients a significantly reduced debt load. Its fees and practices also break a 2009 law passed by the legislature to rein in what debt reduction companies can charge Oregon residents already bogged down with credit problems, the suit says.

The suit says Legal Helpers:

  • Charged $500 to $900 in retainer fees. State law, passed in 2009, says a debt reduction company can ask for no more than $50 in initial fees.
  • Collected $50 to $79 a month in administrative fees. That’s illegal under the 2009 law, the suit says.
  • Required clients to pay a monthly service fee equal to 15 percent of their debt. That’s allowed, but Oregon's law caps a monthly payment at $50. The state says that in every case it found, the monthly payment topped $65.
  • At least 34 of Legal Helper’s clients in Oregon were over 65, and the state says that those cases also include charges of financial abuse of a vulnerable person.

The state of Oregon, through Attorney General Ellen Rosenblum (who is married WW publisher Richard Meeker) is asking for $25,000 for each instance of financial abuse.

Legal Helpers Debt Resolution also faced discipline earlier this year in Illinois, where it penalized the company for charging excessive fees and failing to fully explain its role to clients and also for assisting in the unauthorized practice of law.

Legal Helpers did not immediately return a call for comment.

 
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