State Bans Debt Resolution Firm From Doing Business
CHICAGO (CBS) -- The State of Illinois has ordered a debt settlement company in Chicago to stop doing business.
As WBBM Newsradio 780's David Roe reports, the Illinois Department of Financial and Professional Regulation has ruled that Legal Helpers Debt Resolution may not continue operating.
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The department also issued a fine of $314,000 against the company, or $1,000 for each of 314 clients it has identified, according to a news release.
In one instance, Legal Helpers charged a client identified by the state as T.G. a "retainer payment" of $500, and a monthly maintenance fee of $50, the release said. Additionally, Legal Helpers subcontractor Eclipse charged a service fee of 15 percent of the total debt scheduled to be paid.
Altogether, T.G. paid more than $3,400 to Legal Helpers and Eclipse and more than $3,100 in fees, and ended up with only about $290 to go toward repaying his debt, the release said.
The state has also discovered that Legal Helpers, despite its name, does not provide legal representation or attorneys to customers, and the person signing contracts with customers is not licensed to practice law in Illinois, the release said.
CBS 2 Investigator Pam Zekman reported on Legal Helpers last year. Some former clients complained that the firm repeatedly lost documents they had to submit over and over again, like pay stubs and other records needed to file their bankruptcy petition.
"They are essentially a referral source for a scavenger industry that is unfortunately seeking to profit from others' financial misfortunes," Madigan said in March.
