November 26th, 2008 by Kenneth Long
Florida’s Attorney General Bill McCollum announced a judgment that effectively bars Laura Hess from providing debt settlement or debt management services. This is in response to a lawsuit originally filed in February, 2008 by the Attorney General against Laura Hess and her affiliated companies.
This judgment affects all affiliated companies of Laura Hess, including:
- Laura Hess & Associates, PA
- Hess Kennedy Chartered LLC
- The Consumer Law Center LLC
Many consumers have expressed concern that they had deposited substantial balances with The Consumer Law Center as a part of their debt settlement program. Those deposits were in jeopardy amid allegations that some funds were transferred from the company to another related company.
Receiver Daniel J Stermer has been tapped to sort out the dealings of these companies and to return funds to the customers of Laura Hess. The companies were ordered by a Broward County judge to be liquidated so that refunds could be paid.
Attorney General Bill McCollum had some strong statements regarding the bold actions taken against Laura Hess:
Instead of the assistance they were promised, thousands of cash-strapped consumers found themselves even deeper in debt. By shutting down these operations, we’re sending a strong message that the Attorney General’s Office will not tolerate scam artists who prey on the vulnerable.
Some of the claims were that Hess Kennedy and The Consumer Law Center could settle debts for pennies on the dollar. Allegations also were made that consumers were told that they did not have to pay creditors because they were enrolled in the debt settlement program. Many consumers consequently faced judgments from lawsuits filed by their creditors, of which they received no representation by their debt settlement companies or their legal representatives.
Capital One has announced that they would cancel the credit card debt of 18,000 former cardholders that had defaulted on their debt as a part of their debt settlement program with Hess Kenndy and The Consumer Law Center. HSBC will also forgive the balances of 6,000 victims of Laura Hess and her companies.
These forgiven debts will certainly be good news to the thousands of affected debtors that fell victim to this rogue debt settlement scheme. Although the debts have been forgiven, those that have their debt forgiven should still be prepared for additional tax liabilities if they receive a Form 1099-C as a result of the forgiven debt.
For updates on refunds to clients of Laura Hess & Associates and related debt settlement companies, see the receivership update. The receiver is providing regular updates on the process as well as additional information on claims for refunds.
This entry was posted on Wednesday, November 26th, 2008 at 11:25 am and is filed under Consumer Protection, Credit Cards, Credit Repair, Debt Management, Financial News, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.