The Consumer Financial Protection Bureau has obtained a preliminary injunction against World Law Group and its senior leaders for violations of the Dodd-Frank Act.
The bureau alleges that World Group ran a debt-relief scheme that charged consumers exorbitant, illegal upfront fees and falsely promised to provide teams of attorneys to negotiate rarely-reached debt settlements.
World Law allegedly took $67 million from at least 21,000 consumers before providing any debt-relief services, the bureau said.
According to the CFPB’s complaint, the company promised to help consumers reduce their debts using a “team of attorneys” which would provide legal representation and negotiate debt settlements directly with consumers’ creditors.
World Law allegedly told consumers to stop paying their debts and instead make a single monthly payment to the company, which its lawyers would use to negotiate debt settlements with creditors. According to the complaint, World Law unlawfully kept many of these payments as fees before providing debt-relief services. As a result, consumers paid millions of dollars in illegal fees and suffered additional harms, including being subjected to collection calls, lawsuits, late fees, and lower credit scores.
The bureau named Derin Scott, David Klein, and Bradley James Haskins, who control World Law Group. The lawsuit alleges that the defendants operate through an interrelated series of companies which shared functions, employees, and office locations to operate the debt-relief scheme.
“We took action today against World Law Group for an alleged debt relief scheme that lured consumers with false promises of help from lawyers and collected millions in illegal upfront fees,” said CFPB Director Richard Cordray. “We are seeking to put an end to this scheme and prevent more consumers from being harmed.”