CFPB Wins Temporary Injunction Against Debt Settlement Company

Debt settlement company World Law Group thought it could skirt FTC rules by partnering with a lawyer and rebranding its offerings as “legal services.” That plan may not work much longer. The CFPB filed suit against World Law Group this month, alleging the company collected some $67 million in up-front fees from nearly 21,000 consumers since 2010 without doing much at all to help any of those consumers with their debt load. The U.S. District Court of the Southern District of Florida seems to agree. The court issued a temporary injunction against the debt settlement company this week, freezing company assets.

World Law Group “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.”

It has not been legal for companies to charge up-front fees in exchange for promised future debt management services since 2010, when the FTC amended the Telemarketing Sales Rule (TSR) in an attempt to rein in the growing number of debt relief companies targeting debt-saddled consumers.

View this content by subscribing

Please register to unlock this content

I already have an account. Log in