ADVERTISER DISCLOSURE
AcclaimVisa.com is an independent, advertising-supported web site. AcclaimVisa.com is compensated by the credit card issuers whose offers appear on our site. This compensation can impact how and where credit products appear on our site, including, for example, the order in which they may appear within product listings. AcclaimVisa.com does not offer, review or present all available credit offers.

Feds Take on Debt-Relief Company

[Wednesday, October 2nd, 2013]

The Consumer Financial Protection Bureau (CFPB) claims that a Nevada debt-settlement company violated the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Telemarketing Sales Rule when they promised customers that they could be debt-free in a matter of months, without being charged a fee up front.

According to the CFPB, debt-relief company Morgan Drexen, Inc. told customers that they would not pay until their cases were resolved, either through settlement or debt-reduction, but in fact charged them hundreds—in some cases thousands—of dollars before any work was done on their behalf.

Company collected millions of dollars

Morgan Drexen president and CEO Walter Ledda is being sued by the CFPB, along with his company, for violation of the Dodd-Frank reform, which prohibits deceptive practices by consumer financial services providers. The telemarketing violations are named in the suit as well. The CFPB filed suit in federal district court in August, alleging that Morgan Drexen has illegally collected millions of dollars in fees from over 22,000 consumers since October 2010.

Among the company’s claims is that people will not be charged fees up front, and that they will be debt free in months. The CFPB says that “only a tiny fraction” of their clients ever actually got out of debt completely. On top of that, they paid money to the company before anything had been done to relieve their debt.

Customers paid before work began

Legitimate debt-relief companies do not charge customers until they can show that they have helped a customer settle or otherwise reduce a debt or change the repayment terms. In the case of Morgan Drexen, they advertised two services: debt settlement and bankruptcy assistance.

Neither one was supposed to have any up front charges, yet after signing a contract, customers were asked to pay right away before any work was done on their behalf. In fact, the CFPB says their investigation showed that Morgan Drexen never did anything on behalf of clients’ bankruptcy cases.

CFPB director Richard Cordray says that Morgan Drexen and Walter Ledda took advantage of people who were struggling and that they must be held accountable for their actions. The agency, which was created by President Obama as part of the Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) in 2011, is asking the court to impose penalties on Morgan Drexen as well as requiring them to pay restitution to customers harmed by their actions.

Copyright © 2006-2017
AcclaimVisa.com.
All Rights Reserved

AcclaimVisa.com is an independent, advertising-supported web site. AcclaimVisa.com is compensated by the credit card issuers whose offers appear on our site. This compensation can impact how and where credit products appear on our site, including, for example, the order in which they may appear within product listings. AcclaimVisa.com does not offer, review or present all available credit offers.

All the credit card information presented without warranty and can change. To confirm the terms and conditions click the "Apply Now!" button and review the current information on a secure credit card terms page. AcclaimVisa.com can be compensated by the credit card issuers when visitors apply for a credit card through this website.

* The acclaimvisa.com webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. acclaimvisa.com does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the acclaimvisa.com website are property of their respective owners.