RALEIGH — World Law Group, one of the largest debt settlement firms in the country, has been ordered to stop collecting illegal upfront fees for its debt settlement services, Attorney General Roy Cooper announced today.
“Schemes like this dig consumers deeper into debt and also tie up our courts with bogus legal claims,” said Cooper. “Consumers struggling to tackle their debts deserve legitimate help, not someone trying to make a quick buck off of them.”
Cooper filed suit this week against Swift Rock Financial, Inc. of Austin, Texas, also known as World Law Group, its owner Derin Scott, and other subsidiaries seeking to stop their illegal debt relief scheme from preying on North Carolina consumers.
Today, Wake County Superior Court Judge Howard E. Manning, Jr. agreed with Cooper’s request to temporarily halt the defendants from offering debt settlement services in the state. They are barred under the court order from taking payments or entering into contracts with consumers while the case against them goes forward. Cooper’s office is seeking a permanent stop to the company’s activities in North Carolina and refunds for consumers.
The North Carolina State Bar joined in the lawsuit because World Law Group allegedly advertised and offered legal services but is not authorized or licensed to practice law in North Carolina.
Based on information uncovered during Cooper’s investigation, at least 813 North Carolina consumers have paid World Law Group more than $4.1 million for debt settlement services since 2010. Of that amount, World Law Group collected more than $2.6 million for itself in illegal advance fees and used only $527,000, or less than 13 percent, to pay the consumers’ creditors.
As alleged in Cooper’s complaint, World Law Group markets its services through deceptive mailings that claim the firm can help people settle their credit card debt and become debt-free in two to three years. The defendants’ program is actually a classic advance fee scheme that collects thousands of dollars in upfront fees from consumers but rarely obtains any debt relief for them. Under North Carolina law, it’s illegal to collect any upfront fee for debt settlement services.
According to Cooper’s complaint, World Law Group claims to have a network of local attorneys to help consumers with their debt issues. Cooper’s investigation found no evidence that the group has any licensed attorneys that actually assist consumers. Instead, when consumers are sued by their creditors—often a direct result of World Law Group’s large upfront fees and instructions that consumers stop paying their creditors –consumers are given frivolous pleadings to file in court. This has resulted in some North Carolina District Courts sanctioning consumers, causing them even more financial problems.
For example, a Carrboro woman signed up for World Law Group’s debt relief program and agreed to pay $332.67 a month for 42 months to resolve her $17,000 in credit card debt. She was told to stop paying her creditors and forward any bills or correspondence to World Law Group’s legal staff. After nine months in the program, one of her creditors filed suit against her. World Law Group told her to file bogus legal documents that claimed she had never opened a credit card agreement and didn’t owe the creditor any money. The judge denied her motions, entered a judgment against her, and told her be believed she was being scammed by World Law Group.
“If someone tells you to ignore your creditors and pay them instead, don’t do it,” Cooper said. “For real help dealing with your debts, turn to an accredited non-profit credit counselor in your own community.”
To find an accredited counselor in your local community, contact the National Foundation for Credit Counseling at 1-800-388-2227 or www.nfcc.org.