Posts Tagged ‘William Schneider’

Debt settlement firm settles with Maine for six figures

CONSUMER FORUM

By Russ Van Arsdale, executive director, Northeast Contact

Posted Dec. 22, 2012, at 2:10 p.m.

Here’s a short, sad story of a consumer from southern Maine who ran up more than a quarter million dollars in debt on 10 credit cards.

He hoped for a happy ending when he hired a debt settlement company called Legal Helpers Debt Resolution LLC. He paid the firm an upfront fee and monthly payments, believing its claim that it was effective in “helping consumers resolve their debt problems.”

Legal Helpers website trumpets that it is “the nation’s largest debt resolution law firm” with “offices in 50 states.” When Eric Wright went looking, he found an office in Thomaston but had a lot of trouble finding the attorney who was supposed to be there.

Wright is staff attorney for Maine’s Bureau of Consumer Credit Protection. He was looking for the attorney on behalf of our southern Maine consumer, who was less than pleased with the iceberg-like progress Legal Helpers seemed to be making.

Wright investigated complaints from about two dozen Mainers, most of whom had dropped their business dealings with Legal Helpers.

“They didn’t appear to have done anything,” Wright told me last week. “There never seemed to be a method to the madness of what they were doing” in terms of getting clients’ debts reduced.

As other Mainers complained, Wright advised them to cease doing business with Legal Helpers. To that firm — and apparently a number of others in what Wright terms an “awful industry” — doing business means keeping a large chunk of clients’ money and putting some in accounts to be used for debt settlement. Problem was, Wright said, it might take two or three years to get enough money in those accounts to make debt settlement a reality.

By then, creditors got tired of waiting, and so did many of Legal Helpers’ estimated 15,000 to 20,000 clients nationwide. The firm did negotiate deals on two of our consumer’s accounts, which he paid off at 35 cents on the dollar. He did almost as well on his own, negotiating a rate of 45 cents on seven other accounts.

There was also the matter of registering to operate in Maine, which the company refused to do even though Maine law requires registration by debt settlement companies. Attorneys are exempt, unless those attorneys’ sole activity is settling debts. Legal Helpers claimed it had “partnerships” with attorneys who were licensed in Maine, and so should be exempt.

Wright turned the whole matter over to Maine’s attorney general, William Schneider. Last week, Schneider and Will Lund, superintendent of the Bureau of Consumer Credit Protection, announced a settlement with Legal Helpers and with The Mortgage Law Group LLP, a sister company of Legal Helpers that claimed to have a national reputation for representing homeowners in danger of losing their homes to foreclosure.

Under the agreement, the firms will pay $250,000 to be equitably distributed among more than 300 Maine consumers. The companies also agreed to stop charging monthly fees to present clients and will pay the state $15,000 to cover part of its administrative and investigative costs.

“These settlements send a strong message to others in the debt relief business that the state of Maine will not tolerate those who take advantage of Maine consumers in financial distress,” Schneider said in a news release.

In July, the state of Illinois reached a $2.1 million settlement with Legal Helpers.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

New home heating energy contract protections in place

CONSUMER FORUM

By Russ Van Arsdale, executive director, Northeast CONTACT
Posted April 14, 2012, at 6:48 p.m.

It doesn’t go as far as some wanted, but there is a new law designed to better protect homeowners who prepay for home heating energy.

The Maine Legislature has passed, and Gov. Paul LePage has signed, a law that should provide greater legal protection for people who use prepaid home heating contracts. On March 30, the governor signed LD 1895, An Act To Protect Consumers by Strengthening the Laws Governing Prepaid Home Heating Oil Contracts.

Under the new law, an oil dealer who offers prepaid contracts to Maine consumers for home heating oil, kerosene or liquefied petroleum gas must register the dealer’s intent to offer those contracts with Maine’s commissioner of Professional and Financial Regulation every year by June 30. Those dealers also must file reports with the commissioner by Oct. 31 to demonstrate how they will honor those contracts.

The law was a response to some recent cases in which oil dealers accepted money from consumers, then failed to supply the fuel. This left those customers without oil and without the money they had paid.

In a news release last week, Gov. LePage said the vast majority of oil dealers are honest and reputable. He said Maine law was strengthened “to discourage the rare case when a dealer doesn’t meet its obligation.”

Commissioner Anne Head says officials from her department and Maine lawmakers worked with oil dealers on ways to make sure dealers live up to the terms of their prepaid contracts. She said her department will continue to work with dealers “to provide an extra layer of protection to consumers.”

Stakeholders who worked on the new law saw the reporting requirements as a kind of “early warning system,” which could let regulators know if a particular dealer seemed to be headed for financial trouble. Dealers as a group resisted efforts to require bonding or a mandated line of credit, fearing that banks and bonding agencies would be reluctant to extend credit or issue bonds to cover prepaid contracts.

Violating the new law will be considered a violation of the Maine Unfair Trade Practices Act. The annual report must include a notice that making a false statement can be punished as a Class D crime, which is a misdemeanor. The commissioner has to report to the Attorney General the name of any registered dealer who doesn’t file the required report or who makes a false statement on the report.

The Legislature passed a law in 2005 that bars dealers from offering prepaid contracts, unless they have one of three forms of financial protection:

• A contract with a supplier, guaranteeing a fixed price for the dealer to obtain at least 75 percent of the maximum gallons the dealer has contracts for;

• A surety bond equal to at least half the amount shelled out by prepaying customers; or

• A letter of credit equal to the full amount paid by customers with prepaid contracts.

Last May, Attorney General William Schneider warned consumers to do their homework before signing any prepaid contracts. The previous, colder-than-normal winter saw a number of dealers unable to meet contract obligations. With summer on its way — a time when heating oil prices traditionally drop and customers seek to lock in lower prices for the next heating season — we will renew the AG’s advisory.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit necontact.wordpress.com or email contacexdir@live.com.

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