THIS BUSINESS IS NOT BBB ACCREDITED

Morgan Drexen (Headquarters)

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(800) 868-1458 675 Anton Blvd, Costa Mesa, CA 92626

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Description

This company's business is providing attorney support services for the debt services industry.

BBB Accreditation

This business is not BBB Accredited.

Businesses are under no obligation to seek BBB accreditation, and some businesses are not accredited because they have not sought BBB accreditation.

To be accredited by BBB, a business must apply for accreditation and BBB must determine that the business meets BBB accreditation standards, which include a commitment to make a good faith effort to resolve any consumer complaints. BBB Accredited Businesses must pay a fee for accreditation review/monitoring and for support of BBB services to the public.

Reason for Rating

BBB rating is based on 16 factors. Get the details about the factors considered.

Factors that lowered this business's rating include:

BBB concerns with the industry in which this business operatesLength of time business has been operating264 complaint(s) filed against businessFailure to respond to 10 complaint(s) filed against business20 complaint(s) filed against business that were not resolved43 serious complaint(s) filed against businessOverall complaint history with BBBGovernment action(s) against businessBusiness has failed to resolve underlying cause(s) of a pattern of complaints

Customer Complaints Summary Read complaint details

264 complaints closed with BBB in last 3 years | 99 closed in last 12 months
Complaint Type Total Closed Complaints
Advertising / Sales Issues 48
Billing / Collection Issues 35
Problems with Product / Service 180
Delivery Issues 1
Guarantee / Warranty Issues 0
Total Closed Complaints 264

Additional Complaint Information

Complainants allege unfulfilled contracts, and inability to obtain refunds when services are not performed. Some customers complain that although monthly deductions are automatically withdrawn from their bank accounts, their debts remain unsettled, and their creditors continue to contact them. Other complainants allege calls to the company to check the status of their case result in the run around, or that the company fails to provide disclosures on where their funds are being held. In some cases, complainants report they have not been given an actual contract, but instead the company uses a recorded message that outlines the terms of the agreement. A few customers complain they receive repeated solicitation calls from the company in violation of the "Do Not Call" law. Most complainants request refunds. The company responds to some complaints by advising the complainant that they do not provide debt settlement services to consumers or contract with consumers for such service. The company claims they provide support services to law firms, one of which this consumer may have engaged. In some cases they respond by advising the complainant that the third party attorney has authorized them to make settlement offers. In a few cases the company agreed to issue refunds or partial refunds, or to remove customers names from their calling lists. Some complaints are unresolved meaning the company failed to properly address the complaint allegations or their response was inadequate.

Complaint Details | Definitions | BBB Complaint Process | File a Complaint

  • Government Actions

    Agency: Attorney General - Other States
    Description: On March 18, 2010, the Minnesota Attorney General’s office filed a lawsuit against this company alleging the company signed up Minnesota consumers for debt settlement contracts after August 1, 2009 (the effective date of the new state law) without being registered with the Minnesota Department of Commerce, as required by state law.
    Minnesota law limits the origination and monthly fees that may be charged by licensed debt settlement firms. Depending on the amount of the consumer’s debt and the method they choose to pay the debt settler, state law generally caps the origination fee that may be charged by the debt settler at between $200 and $500 and caps the monthly fee that may be charged by the debt settler at between $50 and $75.
    The suit also alleges that the company charged consumers fees of hundreds or thousands of dollars in excess of those allowed by Minnesota law; that the company violated numerous other provisions of the 2009 Minnesota law by entering into written contracts with consumers that did not satisfy the requirements of Minnesota law; failing to prepare a written individual financial analysis for borrowers reflecting the debt settler’s determination that the proposed debt settlement plan was suitable for the debtor, that the debtor could reasonably meet the requirements of the plan, and that there was a tangible benefit to the debtor into entering into the plan; not providing debtors with the statutory notice that explains that a debtor’s wages or bank accounts may still be garnished; that creditors may continue to contact the debtor or sue the debtor; that fees and other charges will continue to accrue during the term of the debt settlement program; that the debtor’s credit rating may be adversely affected by participating in the program; and by failing to post a surety bond with the State.
    The Attorney General is seeking injunctive relief, civil penalties, and restitution for consumers. The case is currently pending. To file a complaint, consumers may contact the Attorney General’s Office at (651) 296-3353 or (800) 657-3787. Consumers may also download a complaint form by clicking here and return the completed form to: 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101-2131.
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    Date of Action: 3/18/2010

    Agency: Attorney General - Other States
    Description: On May 23, 2011, the West Virginia Attorney General’s office filed suit in the Circuit Court of Kanawha County to ban this company from conducting business in the state. The suit names as defendants Morgan Drexen’s principal owner Walter J. Ledda, attorneys Lawrence W. Williamson of Kansas and Rachelle McIntyre-Nicholson of West Virginia, and the California law firm of Vincent Howard and Damian Nassiri.

    According to the Attorney General, this company claims to be an attorney support services company, providing paralegal and paraprofessional services to attorneys across the country who offer debt settlement services. The State alleges that the company was actually selling debt settlement services to West Virginia consumers by misrepresenting that the services were being provided by lawyers. Lawyers licensed to practice law in West Virginia are exempt from some state regulations governing the debt settlement industry.

    The defendants maintain that they can avoid applicable state debt collection laws and charge higher fees than normally allowed by linking their operations to licensed lawyers, who attempt to get creditors to accept less than what is owed on outstanding debts. The Attorney General contends that these "enrollment lawyers" do no substantative work and are merely renting out their licenses to Morgan Drexen.

    In the complaint, the Attorney General asked the Court the enjoin the out-of-state lawyers from practicing law in West Virginia and cease operation of their unfair and deceptive debt settlement business. The case is currently pending.

    To report a scam or file a complaint, West Virginians can reach the Attorney General’s Office online at www.wvago.gov or by calling the Consumer Protection Hotline at 1-800-368-8808.

    Date of Action: 5/23/2011

    What government actions does BBB report on?

  • Advertising Review

    On June 2, 2011 we wrote to this company concerning a questionable television commercial brought to our attention by the Cincinnati BBB. The commercial ran on Friday, May 21, 2011 at approximately 5:20 pm on the local CW affiliate. The commercial in part stated that consumers who call will receive a free credit report. We asked the company to tell us how consumers can receive a free credit report by calling the company. We also asked if restrictions such as agreeing to services are a condition of receiving the credit report. In addition, the commercial also displayed the words, “Erase Bad Credit" We believe it is wrong to lead consumers to believe that bad credit can be magically erased. In the interest of business self regulation, we have asked the company to consider revising their commercial to avoid any potential misunderstandings by their customers. The company responded on June 9th by providing an explanation on how consumers receive a free copy of their credit report, and by advising us that the credit reports offered are available upon request whether or not the customer decides to retain the law firm. They also brought to our attention that the commercial in question actually displayed the claim "erase bad debt" rather than "bad credit." The company agreed to modify the claim to omit the word "erase" in future commercials.

    What is BBB Advertising Review?

Additional Information

top
100054427
BBB file opened: 7/30/2007 Business started: 8/13/2007
Contact Information
Raychel Harvey-Jones - VP of Media & Corporate Relations
    Rita Augusta (C.O.O.)Walter Ledda (President)Jeffrey Katz (General Counsel)Media ()
Number of Employees

305

Business Category

Debt Relief Services - non-compliant with FTC Rule

Alternate Business Names
Morgan DrexenMorgan Drexen Integrated Systems
Industry Tips
This company claims to provide support services to law firms in the debt settlement industry. Although the company contends they do not provide debt settlement services to consumers or contract with consumers for such service, their customers disagree. Customers report the company makes monthly deductions from their bank accounts claiming the funds are saved until a sufficient amount is reached to make settlement offers to their creditors. Some report the company uses a recorded message as a contract, and the location of the escrow account holding their money is not disclosed.

Our experience with debt negotiating companies is that they attract heavily indebted clients by claiming to be able to settle the clients’ debts for far less than the amount owed and to stop creditors’ calls. They often claim, also, that their services are more effective than those provided by credit counseling services.

These companies usually instruct their clients to stop paying their creditors. Some companies direct them to make their payments to the debt negotiation company instead and promise, when the company has accumulated enough to offer a cash settlement to one or more creditors (which can take as long as two or three years), to pay off the debt. The debtor must pay fees to the service during the time the payments are accumulating.

Other companies simply collect the fees and advise debtors to save their money to pay their creditors themselves. California law limits the amount of fees debt negotiators can charge you, but by not collecting the money and distributing it to your creditors for you, companies can remove themselves from the limiting statutes and charge whatever they wish. What they are supposed to do for you while you’re saving up your money is to contact your creditors and inform them that they’re working with you, negotiate the amount to settle your debt, and ask them stop contacting you.

However the company operates, though, complainants allege that creditors continue to harass them, fees and interest continue to accumulate, the companies do not contact the creditors, creditors increase their collection efforts and sometimes sue for payment, the debtor’s credit is ruined, and they end up worse than before they contacted the service.

Debtors may not realize that if their creditors do accept a negotiated settlement, the amount forgiven constitutes taxable income.