Alleged Co-Conspirator to Cooperate in Legal Helpers Class Action Lawsuit

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On Tuesday, a Minnesota federal judge granted preliminary approval to a class action settlement related to allegations that CDS Client Services Inc. and Legal Helpers Debt Resolution LLC set up a debt settlement scheme that swindled consumers out of thousands of dollars each.

Under the terms of the class action settlement, the plaintiffs agreed to drop their claims against CDS. In exchange, CDS agreed to cooperate in the ongoing class action lawsuit against Legal Helpers by producing relevant documents, supplying deposition testimony and providing other information relevant to the litigation.

Plaintiff Reece Harrison initially filed the Legal Helpers class action lawsuit in 2012. He alleged that Legal Helpers misrepresented its debt resolution services and qualifications to vulnerable Minnesotans who were already having a hard time paying their bills. Harrison claimed that Legal Helpers, which does business as The Law Firm of Macey Aleman Hyslip & Stearn, used its status as a law firm to avoid registering with the state. Under Minnesota law, debt settlement service providers are required to register with the state.

In his class action lawsuit, Harrison claimed that Legal Helpers, under the guise of a law firm, was able to circumvent Minnesota law that sets limits on the fees debt settlement service providers are allowed to charge and requires the providers to make certain disclosures about the risks inherent in debt settlement services. As a result, he and numerous other Minnesota consumers paid Legal Helpers fees that were thousands of dollars in excess of the state-mandated maximum and was not made aware of the risks of debt settlement services.

Legal Helpers entered into an agreement with CDS to provide debt settlement services, allowing CDS to evade Minnesota’s consumer protection law by using the Legal Helpers law firm as a front. In the class action lawsuit, Harrison claims that the conspiracy gives consumers the illusion that Legal Helpers is providing legal services even though all of the debt settlement services are provided by CDS.

“Defendants prominently advertised that their attorneys review the consumer’s current financial situation and tailor a debt resolution plan that is unique to their situation,” the class action lawsuit said. “All correspondence throughout the entire sales process appears to be coming from the law firm LHDR, however, most fax numbers, telephone numbers, addresses, and communications were from Defendant CDS.”

Harrison’s class action lawsuit is just one of several nationwide lawsuits accusing Legal Helpers of deceiving vulnerable consumers about the nature of its debt settlement services. CDS has indicated that it is in danger of bankruptcy and would be unable to defend itself in multiple lawsuits. Under the terms of the class action settlement, CDS has agreed to pay the cost of providing notice of the settlement to the Minnesota Class Members.

The plaintiffs are represented by Shawn J. Wanta of Baillon Thome Jozwiak & Wanta LLP, Brian Ellsworth of the Law Office of Brian J. Ellsworth, and David W. VanDerHeyden of VanDerHeyden Law Office.

The Legal Helpers Class Action Lawsuit is Harrison v. Legal Helpers Debt Resolution LLC, et al., Case No. 0:12-cv-02145, in the U.S. District Court for the District of Minnesota.