• Youtube
  • Linkedin
  • Avvo
  • Gplus
  • Facebook
  • Twitter
Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney
  • Our Story
    • About Diane L. Drain & Her Promises to Her Clients
    • Comments From Our Clients: We Have the Best Clients Ever
    • Legal Services: Bankruptcy and Foreclosure
    • Bankruptcy & Religion
    • Diane’s Awards & Recognitions
    • Life Tips and Humor
  • Bankruptcy
    • General Review of Bankruptcy
    • Bankruptcy for an Individual
    • Bankruptcy For a Business
    • Bankruptcy Help For Creditors
    • Arizona Exemptions (download link)
    • Federal Exemptions (download link)
    • Bankruptcy FAQs
      • What are the Different Chapters?
      • Difference Between Chapter 7 and 13
      • Chapter 7 FAQs
      • Chapter 13 FAQs
      • Small Business FAQs
    • Bankruptcy Articles
      • Bankruptcy Articles
      • Important Deadlines – Chapter 7 & 13
      • Bankruptcy Glossary
    • Resources: Consumer & Bankruptcy
  • Real Estate
    • Real Estate Overview
    • Real Estate FAQ
    • Real Estate Articles & Links
    • Real Estate Glossary
  • Trustee Sales
    • Anti-Deficiency Flow Chart (Arizona)
    • Trustee Sales
      • Trustee Sales & Foreclosure Overview
      • Trustee Sale Law & Case Law
      • Trustee Sale FAQ
      • Trustee Sale Articles and Links
      • Arizona Trustee Sales and Bankruptcy
      • How Does a Lender Start a Trustee’s Sale?
      • Pending Trustee Sales
    • Deed in Lieu of Foreclosure
    • Eviction – Forcible Entry
      • Eviction “FED” Overview
      • Eviction “FED” Questions
      • Eviction “FED” – Law
      • Eviction “FED” – Articles & Links
    • Excess Sale Proceeds
  • Resources
    • Law Blog
    • Videos
    • Comments From Our Clients & Others
    • Site Index
  • Contact
  • For Lawyers
  • Search
  • Menu
You are here: Home / Bankruptcy Articles / Paralegal and Credit Counseling Schemes and Scams
[print-me]

Paralegal and Lawyer Schemes and Scams, INCLUDING ‘WE THE PEOPLE’

Quick Page Index

  • 1 Paralegal and Lawyer Schemes and Scams, INCLUDING ‘WE THE PEOPLE’
    • 1.1 PARALEGAL and LAWYER SCHEMES & SCAMS, INCLUDING ‘WE THE PEOPLE’
      • 1.1.1 LAW SOLUTIONS CHICAGO, UPRIGHT LAW and KEVIN CHERN, PARTNER, SANCTIONED FOR ’UNCONSCIONABLE HARM TO CLIENTS’
      • 1.1.2 FLORIDA SUPREME COURT SANCTIONS “WE THE PEOPLE” FOR UNAUTHORIZED PRACTICE OF LAW
      • 1.1.3 AMERIDEBT and NCO GROUP, INC, NCO FINANCIAL SYSTEMS & NCO PORTFOLIO MANAGEMENT, INC.
      • 1.1.4 More problems with consumer credit counseling companies – including AmeriDebt – filing for bankruptcy and charged with fraudulent activities.
      • 1.1.5 UTAH CREDIT COUNSELING SERVICE SHUT DOWN
      • 1.1.6 SENATE REPORT RAISES CONCERNS ABOUT CREDIT COUNSELING COMPANIES (3/2004)

PARALEGAL and LAWYER SCHEMES & SCAMS, INCLUDING ‘WE THE PEOPLE’

These are just a drop in the bucket of the thousands of scams suffered on desperate people asking for help (some by attorneys).

LAW SOLUTIONS CHICAGO, UPRIGHT LAW and KEVIN CHERN, PARTNER, SANCTIONED FOR ’UNCONSCIONABLE HARM TO CLIENTS’

greed

Greedy lawyers

Report from the Department of Justice, 2/13/18 – Law Solutions Chicago, doing business as “UpRight Law”,  UpRight’s managing partner Kevin Chern, and affiliated partner attorneys Darren Delafield and John C. Morgan Jr. were sanctioned hundreds thousands of dollars “for causing ‘unconscionable’ harm to their clients”.

The court found that the law firm and its attorneys, “systematically engaged in the unauthorized practice of law, provided inadequate representation to consumer debtor clients, and promoted and participated in a scheme to convert auto lenders’ collateral and then misrepresented the nature of that scheme..” said Director Cliff White of the Executive Office for U.S. Trustees.

The court also revoked UpRight’s bankruptcy filing privileges in the Western District of Virginia for not less than five years, and its local partners for 12 and 18 months, respectively. The bankruptcy court also sanctioned Sperro LLC (Sperro), an Indiana towing, ordering turnover of funds.

“Lawyers who inadequately represent consumer debtors harm not only their clients, but also creditors and the integrity of the bankruptcy system,” said Director White. “The damage caused increases exponentially when they operate nationally, like UpRight. This case is demonstrative of the vigorous enforcement actions that the U.S. Trustee Program can and will take to protect all stakeholders in the bankruptcy process.”


Additional articles:

  • UpRight Sanctioned for Harming Consumers
  • UpRight Law attorneys sanctioned for unethical conduct

Robbins v. Delafield (In re Williams), 16-7024 (Bankr. W.D. Va. Feb. 12, 2018) Link to court decision…

FLORIDA SUPREME COURT SANCTIONS “WE THE PEOPLE” FOR UNAUTHORIZED PRACTICE OF LAW

FRAUDOn April 29, 2004 the Florida Supreme Court issued its opinion in The Florida State Bar v. We The People. The court found that in five cases employees of We The People had engaged in unauthorized practice law, by advising bankruptcy clients (as well as divorce and will clients) on legal remedies, which forms to prepare and how to prepare them, correcting clients’ errors, and communicating with third persons such as adversary parties on behalf of the clients, notwithstanding that WTP hired a licensed Florida attorney to provide legal advice to their customers. The Court enjoined WTP from any such activities, and assessed $9,000 in sanctions. The Florida Bar v. We The People Forms and Service Center of Sarasota, Inc. et al. No. SC02-1675

The above is just a few examples of the numerous problems with “We the People” and others who have been sued for fraud and more. Do an Internet search before hiring anyone, including lawyers.

AMERIDEBT and NCO GROUP, INC, NCO FINANCIAL SYSTEMS & NCO PORTFOLIO MANAGEMENT, INC.

More problems with consumer credit counseling companies – including AmeriDebt – filing for bankruptcy and charged with fraudulent activities.

NCO Financial Systems, Inc. and NCO Portfolio Management, Inc. fined $1.5 million FOR VIOLATIONS OF FAIR CREDIT REPORTING ACT. In order to resolve claims of illegal conduct, per a consent judgment filed in the U.S. District Court for the Eastern District of Pennsylvania May 12, 2004, a major debt collector will refrain from future violations of the Fair Credit Reporting Act and will pay a $1.5 million civil penalty (U.S. v. NCO Group, Inc., E.D. Pa., No. 992-3012, 5/12/04).

The complaint, filed by the Justice Department, at the request of the Federal Trade Commission, alleged that NCO Group, Inc. and affiliates (NCO Financial Systems, Inc.; and NCO Portfolio Management, Inc.) reported incorrect information about consumer accounts to credit bureaus in violation of Section 623(a)(5) of the FCRA and Section 5 of FTC Act.

UTAH CREDIT COUNSELING SERVICE SHUT DOWN

Consumers who relied on Consumer Credit Counseling Service of Utah to handle their debt payments are being urged to contact creditors directly after the Utah Division of Consumer Protection temporarily shut down the agency Tuesday.

Participants in CCCS debt-management programs each month paid the nonprofit organization what they owed for all their bills. CCCS then forwarded payments to creditors from a trust account. The state is investigating why the trust account did not have enough money to pay all its clients’ bills. SOURCE: Knight-Ridder / Tribune Business News

SENATE REPORT RAISES CONCERNS ABOUT CREDIT COUNSELING COMPANIES (3/2004)

According to a report issued late March by the Senate Governmental Affairs Committee’s Permanent Subcommittee on Investigations staff, the business model for the traditional nonprofit credit counseling company has changed significantly with many newer entities generating profits from for-profit subsidiaries. The report resulted from an investigation to determine the state of the credit counseling industry and to explore viable solutions to remedy problems.

In the report, entitled Profiteering in a Non-Profit Industry: Abusive Practices in Credit Counseling, many of those new organizations are “using a for-profit model designed so that ‘their nonprofit credit counseling agencies generate massive revenues for a for-profit affiliate for advertising, marketing, executive salaries, and any number of other activities other than actual credit counseling. The new model looks to the consumer to provide those revenues.” Staff concluded this model resulted in “increased consumer complaints; such as excessive fees, nonexistent education, poor service and generally being left in worse debt than when they initiated their debt management program.”

According to the report, there is little uniformity in industry regulation with their currently being various professional, state, and federal standards; some being mandatory, others are voluntary.

The subcommittee staff offered the following findings and recommendations: * some credit counseling agencies are engaged in abusive practices hurting debtors, including charging excessive fees, putting marketing before counseling, and providing debtors with inadequate educational, counseling, and debt management services; * some nonprofit credit counseling agencies are funneling millions of dollars each year from debtors to insiders and affiliated for-profit businesses, possibly violating tax laws prohibiting tax-exempt charities from benefiting private interests; * as part of ongoing efforts to halt abusive practices in the credit counseling industry, major creditors should review and strengthen their standards for credit counseling agencies with whom they do business; * the FTC and IRS should accelerate their enforcement efforts to review suspect credit counseling agencies and take appropriate action against agencies and other who are violating restrictions on tax exempt entities or engaging in deceptive or unfair trade practices-and should consider coordinating with state enforcement agencies to make efficient use of government resources; * the Senate should consider modifying credit counseling provisions in the pending bankruptcy legislation to strengthen protections against abusive practices, including determining whether a single authority, the U.S. bankruptcy trustee, should issue a central list of qualifying credit counseling agencies to provide counseling to bankruptcy petitioners and whether credit counseling fee limits would be appropriate; and * the Senate should consider a bill, either modeled on the Debt Repair Organizations Act of 1996 or expanding that law’s application to reach nonprofit entities, to strengthen protections against abusive practices in the credit counseling industry.

The staff report noted: When profit motive is injected into a non-profit industry, it should come as no surprise that harm to consumers will follow. Indeed, the primary effect of the ‘for-profit model has been to corrupt the original purpose of the credit counseling industry-to provide advice, counseling, and education to indebted consumers free of charge or at minimal charge, and place consumers on debt management programs only if they are otherwise unable to pay their debts. Some of the new entrants now practice the reverse-provide no bona fide education or counseling and place every consumer onto a debt management program at unreasonable or exorbitant charge. The subcommittee staff’s full report.

Click here for steps to your free bankruptcy consultation.

Click To Call Us:

602.246.7106

SHARE THIS PAGE

CONTACT DIANE

  • If you want to talk to Diane please fill out the form below or call our office.

  • This field is for validation purposes and should be left unchanged.

Bankruptcy FAQs

  • What are the Types of Bankruptcy?
  • General Bankruptcy Questions
  • Chapter 7 Questions
  • Chapter 13 Questions
  • Difference Between Chapter 7 and 13
  • Small Business Questions
  • Assistance For Creditors

Articles & Resources

  • Bankruptcy Articles
  • Consumer & Bankruptcy Resources
  • Real Estate Articles & Links
  • Trustee Sale Articles and Links
  • Eviction “FED” – Articles & Links
diane drain logo
Phone: 602-246-7106

HELPFUL QUICK LINKS

BANKRUPTCY HELP FOR INDIVIDUALS
BANKRUPTCY HELP FOR COMPANIES
BANKRUPTCY HELP FOR CREDITORS
ARIZONA EXEMPTIONS
ARIZONA ANTI-DEFICIENCY
OUR CLIENT COMMENTS

BANKRUPTCY QUESTIONS

WHAT IS BANKRUPTCY?
WHAT IS A CHAPTER 7?
WHAT IS A CHAPTER 13?
WHAT IS A SMALL BUSINESS BANKRUPTCY?
TYPES OF BANKRUPTCY

RESOURCES

OUR STORY
LAW BLOG
VIDEOS
CONTACT US
PAY A BILL ON-LINE
SITE MAP
Disclaimer: The information in this web site is not intended to provide legal advice or to create an attorney-client relationship; but is intended for general education and information purposes only. Laws change periodically, therefore the information in this site may not be accurate. It is imperative that you seek legal counsel in order to determine your rights and obligations under the law and based upon your specific circumstances. | Privacy Policy | Disclaimer.
Address: Law Office of D.L. Drain, P.A. 2375 E Camelback Rd #600, Phoenix, AZ 85016
© Copyright - The Law Office of D.L. Drain, P.A., Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney | Website
Scroll to top