CFPB Says Morgan Drexen Dupes Consumers Into Illegal Fees

Law360, New York (August 20, 2013, 7:29 PM EDT) -- The Consumer Financial Protection Bureau sued Morgan Drexen Inc. on Tuesday in California federal court, claiming the company collects illegal upfront fees for debt-relief services through a deceptive contract structure and misleads consumers about its ability to eliminate their debts.

The agency says the operations of Nevada-based Morgan Drexen and its CEO Walter Ledda violate the Telemarketing Sales Rule and the Dodd-Frank Wall Street Reform and Consumer Protection Act, claiming the company skirts laws generally forbidding upfront fees by having customers who sign a contract for debt-settlement services also sign a second, purportedly bogus bankruptcy services contract requiring them to pay...

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