Last month, a Wisconsin Court of Appeals rejected a debt settlement service provider’s claims that it did not violate state consumer protection laws on debt negotiation.
In 2013, the California-based company was accused of unlawfully charging Wisconsin consumers for debt settlement services since 2007.
The Wisconsin Department of Financial Institutions ordered the company, Morgan Drexen Inc., to cease operations in Wisconsin and pay $6.1 million in forfeitures and restitution, the Milwaukee Journal Sentinel reported.
Morgan Drexen has said it will appeal the decision to the state Supreme Court.
In Wisconsin, debt settlement and negotiation companies that negotiate with creditors on behalf of consumers have to abide by certain requirements, including getting a license and providing the Division of Banking with certain information. State law also limits the amount of service fees they can charge.
This is just another reminder that there are many so-called debt relief services out there that cannot be trusted. We are lucky that our state carefully regulates debt settlement and negotiation companies to protect consumers, but that doesn’t mean that fraudulent companies don’t exist.
Our Milwaukee bankruptcy law firm isn’t just a debt settlement or negotiation company, our attorneys are regulated by the Wisconsin Bar and we have duties and responsibilities to the public that we take very seriously.
Instead of going to a debt settlement or negotiation company that makes big promises with big price tags, look to a firm that you can trust. Too many of the companies out there are fraudulent and make promises that they don’t follow-through on.
