Legal Helpers Debt Resolution, a Chicago-based debt settlement company, was fined $314,000 on Monday and issued a cease-and-desist order of its unlicensed business by the Illinois Department of Financial and Professional Regulation (IDFPR).
The suit alleged that Legal Helpers charged upfront fees for debt-consolidation services, which became illegal in Illinois last year through the Debt Settlement Consumer Protection Act.
The act forbids debt settlement companies from charging upfront fees and requires that they only collect fees if a consumer's debt is settled. Attorneys are exempted, allowing them to charge upfront fees.
At least 314 agreements between Legal Helpers and clients seeking to settle debts were signed by Jeffrey Hyslip, who is not licensed to practice law in Illinois, according to the IDFPR.
"Despite the name, 'Legal Helpers' does not provide legal representation to consumers or otherwise act in an attorney capacity," the cease-and-desist order says.
In at least one case, IDFPR said that Legal Helpers accepted payments from a client but did not settle the client's debts. The client paid more than $3,400 to the firm and its subcontractor, Florida-based Eclipse Servicing Inc. The firm charges nonrefundable fees that include a $500 retainer, a $50 monthly charge and 15% of the total debt.
Legal Helpers has responded that all aspects of its business are properly licensed and that Hyslip is an attorney licensed in Ohio. It said all documents involving Illinois cases are reviewed by an attorney licensed in Illinois.
Earlier this year, Attorney General Lisa Madigan filed a suit (
