By Katalina M. Bianco, J.D.
The Consumer Financial Protection Bureau has obtained a preliminary injunction against three individuals whom the bureau alleges ran a debt-relief scheme that charged consumers illegal up-front fees while providing little or no relief. The injunction also halts the operations of four companies the individuals used under a variety of different business names. According to the CFPB, the organization, referred to as World Law Group, took at least $67 million from 21,000 consumers before any services were performed and seldom obtained any relief.
The CFPB’s complaint claims that Orion Processing, LLC, Family Capital Investment & Management LLC, World Law Debt Services, LLC, and World Law Processing, LLC, under eight different business names, constituted “an interelated network of companies that have common business functions.” The three individuals are the owners or operators of the four companies.
Debt-relief scheme. According to the complaint, the World Law Group organization promised that a team of attorneys would negotiate debt settlements on behalf of consumers. Consumers were told to stop paying their bills and instead make a single monthly payment to World Law, which would use the funds to pay the consumers’ debts. However, World Law actually kept much of this money as fees.
While 99 percent of World Law’s customers paid up-front fees in some form, these fees actually are banned by the Telephone Sales Rule, the bureau says.
Preliminary injunctions. The U.S. District Court for the Southern District of Florida issued two preliminary injunctions that together cover all three individuals and all four companies. One order applies to Bradley James Haskins, an attorney who is the purported Chairman of World Law Group. The other applies to Derin Scott and David Klein, said to be owners and officers.
The orders temporarily ban all of the individuals and companies from any participation in debt relief services and from any efforts to collect fees from consumers for such services. They are ordered to disable, but preserve, any website that was used in the business. Also, debt relief business-related assets of the defendants are frozen, except that any assets located off-shore are to be repatriated and disclosed to the CFPB.
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