Legal Newsline

Wednesday, April 1, 2020

McGraw investigates attorney over debt relief practices

By Keith Loria | Apr 3, 2009

Darrell McGraw (D)

CHARLESTON, W.Va. (Legal Newsline) - Under an order signed by the Circuit Court of Kanawha County, an Illinois attorney and his debt relief company have been temporarily prohibited from settling consumers' debts.

Signed on March 30, 2009, the order states that attorney Robert K. Lock, Jr. and Credit Collections Defense Network, will remain enjoined until they comply with an investigation by West Virginia Attorney General Darrell McGraw.

Credit Collections Defense Network of Chicago, with additional offices in Cattaraugus, New York, and Robert Lock of Chicago, claim to assist consumers who are struggling financially to make payments to their creditors. The sometimes controversial methods involve making repayment plans to help consumers repay outstanding debts at a deep discount to avoid being sued or filing for bankruptcy.

Monthly payments are then made by consumers to the debt settlers in turn for which the debt settlers claim to negotiate with creditors to reduce the amount of debt owed.

The Democratic attorney general said he believes that while the company's approach to helping consumers struggling with debt may be practical for some, because of the legal issues involved, it should only be offered by those licensed to practice law in West Virginia.

According to West Virginia law, debt settlement only permits for-profit companies to charge a monthly service fee of 2 percent of the payments made by consumers. McGraw is alleging that Credit Collections Defense Network was charging more than that fee and not settling debts.

"My office will continue to scrutinize the debt relief industry in an effort to protect consumers who are already facing dire financial circumstances from paying excessive fees for services that may leave them in worse shape than before," McGraw said.

Want to get notified whenever we write about ?

Sign-up Next time we write about , we'll email you a link to the story. You may edit your settings or unsubscribe at any time.