A Florida law firm that claimed it would reduce consumers' debts has been banned from doing debt relief work in North Carolina, according to North Carolina Attorney General Roy Cooper's office.
The Consumer Law Group (CLG) of Boca Raton, Fla. will pay $600,000 in refunds to North Carolina consumers who paid the company to help them get out of debt, under the terms of a consent judgment approved in Wake County (N.C.) Superior Court.
CLG also agreed not to collect an estimated $600,000 of charges from North Carolina consumers for a total of $1.2 million in consumer savings and refunds. The company also will pay $50,000 to the state for costs related to the case.
Cooper filed suit against CLG in October 2010, alleging that more than 650 state residents had paid the firm for debt relief but had gotten little to no help in return. In the state of North Carolina, it is illegal to charge an upfront fee for debt settlement or reduction services.
CLG claimed that the debt adjusting law was unconstitutional and that Cooper had no jurisdiction over the conduct of attorneys. A Superior Court judge rejected those claims.
Cooper alleged that CLG deceived consumers by promising to cut their debts in half and leave them debt-free without bankruptcy. CLG allegedly rarely worked out agreements to settle debts and kept the massive fees anyway. The company also allegedly misled consumers into believing that its program was affiliated with the government and performed by attorneys when it is not.
CLG officials did not immediately return calls for comment. Under the terms of the agreement, CLG is barred from soliciting, marketing or offering any debt negotiation or debt settlement services in the state. CLG also is prohibited from claiming that its services are performed by attorneys, government sponsored or that it can provide legal representation for consumers.
