The Consumer Financial Protection Bureau (CFPB) is cracking down on an operation that allegedly runs a debt-relief scheme that charges consumers exorbitant, illegal, upfront fees.
In announcing it obtained a preliminary injunction against World Law Group and its senior leaders, the CFPB claims the debt-relief scheme falsely promised consumers a team of attorneys to help negotiate debt settlements with creditors, failed to provide legal representation, and rarely settled consumers’ debts.
Additionally, World Law is accused of taking $67 million from at least 21,000 consumers before providing any debt-relief services. The order, obtained in U.S. District Court, halts World Law’s operations and freezes defendants’ assets while the case is pending.
Action was taken against World Law, according to CFPB Director Richard Cordray, “for an alleged debt relief scheme that lured consumers with false promises of help from lawyers and collected millions in illegal upfront fees. We are seeking to put an end to this scheme and prevent more consumers from being harmed.”
The lawsuit names Derin Scott, David Klein, and Bradley James Haskins, who control World Law Group. The lawsuit alleges that the defendants operate through an interrelated maze of companies, including Orion Processing, LLC, d/b/a World Law Processing, WLD Credit Repair, and World Law Debt; Family Capital Investment & Management LLC (a.k.a FCIAM Property Management); World Law Debt Services, LLC; and World Law Processing, LLC. The companies comingle funds and share functions, employees, and office locations to operate the debt-relief scheme.
According to the complaint, World Law promised to help consumers reduce their debts using a “team of attorneys,” including “local attorneys,” that would provide legal representation and negotiate debt settlements directly with consumers’ creditors. The firm allegedly told consumers to stop paying their debts and instead make a single monthly payment to the company, which its lawyers would use to negotiate debt settlements with creditors.
According to the complaint, World Law unlawfully kept many of these payments as fees before providing debt-relief services. As a result, consumers paid millions of dollars in illegal fees and suffered additional harms, including being subjected to collection calls, lawsuits, late fees, and lower credit scores.
The CFPB complaint is not a finding or ruling that the defendants have actually violated the law. The Court issued the preliminary injunction because it found that the agency is likely to prevail and that the public interest is served by granting the order. The case will proceed until the court makes a final determination or the parties settle the matter.