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CFPB wins case against Morgan Drexen

Some Kentucky consumers who are overwhelmed by debt try to resolve them by going through debt relief agencies. While some of these companies are able to help people, others are scams and take advantage instead by charging outrageous fees.

Recently, the Consumer Financial Protection Bureau won a lawsuit it had filed against one such debt relief company, Morgan Drexen. The company was ordered to pay $132.8 million to its customers as restitution and another $40 million in civil penalties. It had charged people fees upfront for debt relief services, which is illegal. The company had also made misrepresentations to people regarding what it could do for them.

In addition to its debt relief services, the company also had another branch allegedly providing bankruptcy services. The CFPB said the company did very little to help people obtain financial relief from their debts, and it falsified bankruptcy documents to try to make it appear that the company had done so when it was under investigation. In addition to the penalties and restitution, Morgan Drexen was also prohibited from offering any debt relief services in 2015 following a judgment that it had acted in bad faith.

People sometimes feel desperate when they are trying to get debt relief. Some companies, are predatory and will try to take advantage of the people who seek out their help. In some cases it may be better for consumers to file bankruptcy than to try to repay the debts in some cases. If so, they may want to meet with a bankruptcy attorney to learn about the eligibility and other requirements.

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Law Office of Ginger C. Cord, PSC
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Lexington, KY 40507

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