Scam Alert: Legal Helpers Debt Resolution Sued by State of North Carolina for Fraud

Attorney General Roy Cooper fights against scams preying on North Carolina consumers

Image source: Flickr User Jean-Etienne Minh-Duy Porrier

We like to keep our clients and other North Carolina consumers up to date on scams so they can protect themselves and their money. Today we take a look at a firm that promised to help debtors but instead has taken money from them and produced no results. The company also went by the name LHDR and is still operating a website despite the lawsuit in NC, a forced bankruptcy in New York and other accusations against the firm. They may also be known as Jacoby & Meyers Bankruptcy or Macey, Aleman, Hyslip & Searns.

What AG Roy Cooper Has to Say About LHDR

North Carolina's Attorney General has sued the Chicago-based firm for cheating more than 400 NC residents of more than one million over the last few years. This lawsuit accuses the firm of a “classic advance scam fee” that illegally took fees in advance, then never provided the promised services. The suit seeks to block LHDR and its principals from doing business in our state and gain refunds for customers that were scammed.

The company charged more than $1.5 million in advance fees but used just 15% of this to pay consumer bills. The suit is against LHDR and attorneys Jeffrey Hyslip, Jason Searns, Jeffrey Aleman and Thomas Macey. AG Cooper says, “Consumers overwhelmed with debt need real help, not schemers looking to make a quick buck off of them. We pushed for a strong law in North Carolina that makes it illegal to collect money up-front for debt relief work and we'll keep enforcing the law against violators.”

How LHDR Violated North Carolina Law

Cooper himself fought to enact a law that makes it illegal for firms to collect advance fees to help consumers settle debts. How this scheme/scam works is that a firm charges indebted consumers a hefty up-front fee and promises to negotiate on their behalf to lower unsecured debts. In reality, they take your money and don't get you any meaningful results and actually make your circumstances worse because you're out-of-pocket for whatever you paid them, plus the original debt you were struggling to pay.

The state of Illinois also went after LHDR for violating their up-front fee laws, as well. In the IL suit, then state attorney general Lisa Madigan said that the firm was “a front” and that any “debt settlement service was contracted out to nonlawyer, third-party companies.” The state of West Virginia also filed suit against LHDR earlier this year for taking advance fees and promising to provide legal services in the state when none of their attorneys was licensed to practice there.

How AG Cooper Is Protecting North Carolina Consumers

This is not the first time Cooper has gone after a debt settlement firm. In 2013, he won a ban against World Law Group (also known as Swift Rock Financial) and Global Client Solutions. In 2012, he won a similar judgment against The Consumer Law Group. LHDR charged customers between $2,500 and $3,000 up-front for mortgage modification and debt settlement services, but then failed to deliver. When pressed for refunds for non-performance, nominal refunds were offered.

Cooper's office has been very aggressive in fighting to protect consumers in our state from scam firms like these and to get their money back when they've been taken advantage of. In an announcement about the lawsuit, Cooper warned consumers: “Don't put yourself deeper in a hole by falling for empty promises to settle your debt for pennies on the dollar.” This is good advice. Anyone that makes promises that sound too good to be true is likely scamming you, so beware.

For legitimate debt relief, contact the law offices of John T Orcutt. We are not a national practice, specialize in North Carolina bankruptcy and consumers and always operate within legal and ethical guidelines established by the state. If you are deep in debt and need help, bankruptcy may be the best solution for you. Contact us today for a free consultation. We'll look at your debt, assets and income and offer you legal advice for free with no obligation and no up-front fees.