I previously published a story about an outfit out of Florida being challenged in court over allegations they were selling credit repair services. See this story. Well some of the same players are back in it again. This new suit names Berges Law Group, Otto Berges, Consumer Protection Counsel, Debt Be Gone, and Gregory Fishman.
Well apparently a couple of lawyers are going back at it again with yet another consumer. Attorneys Chad Thomas Van Horn ([email protected]) and Nathan E. DeLadurantey ([email protected]) have filed suit against the collective. This time the consumer is a resident of Idaho.
The allegations in the complaint are:
In or around April 2014 Mr. Bryson was looking for a way to consolidate his debt and improve his credit score.
Defendant Debt Be Gone sent multiple emails to Mr. Bryson, and eventually he applied for their services.
As a result, he was emailed a contract from Defendant Consumer Protection Counsel to sign and return.
Services included in the contract include disputing account’s accuracy, sending letters of legal representation, requesting verification from debt collectors, reviewing responses received, requesting the credit reporting agencies to reinvestigate inaccurate or derogatory information, filing complaints with regulatory agencies, litigating claims, and settling claims.
Included in the contract is a provision in the Scope of Legal Representation section, “Attorney shall then remit to the three major credit reporting agencies indicating that the Client desires that the credit reporting agencies reinvestigate any inaccurate or derogatory information contained in the Client’s consumer credit report.”
Asking for a reinvestigation of an item of information on a credit report is the essence of a credit report dispute.
If a derogatory item is removed from a person’s credit report, this will increase the person’s credit score.
Disputing information is a common way to increase one’s credit score.
Mr. Bryson was promised that his credit score would move from “poor” to “good” and that disputed accounts would be removed from his credit report.
When the Honorable Judge Griesbach, Chief Judge of the Eastern District of Wisconsin, reviewed Defendant Consumer Protection’s contract in August 2014, he found that “[t]hese ‘legal services’ are exclusively backward looking and at least impliedly directed at improving Plaintiff’s ‘credit record, credit history, or credit rating.’ 15 U.S.C. §1679a(3)(A)(I).” Bennett v. Berges, et al., No. 14-cv-509 (E.D. Wis. Aug. 27, 2014) (order granting in part and denying in part motion to dismiss).
In the case in Wisconsin, Judge Griesbach found that when Otto Berges, Berges Law Group, Consumer Protection Counsel “used an instrumentality of interstate commerce to sell services that were directed at repairing Plaintiff’s credit in return for money, they fall within the definition of a credit repair organization and credit services organization.”
Along with the contract, the email to Mr. Bryson contained an agreement with RAM (related to ACH withdrawals), power of attorney, an affidavit (which appears to be a document they would use to dispute debts), and a sheet containing alleged compliance questions
Per the terms of the contract, Mr. Bryson was to pay an initial payment of $199.00 “that shall be deemed earned upon receipt.”
Mr. Bryson was then to pay “a NON-REFUNDABLE fee of $1,982. The fee [was to] be paid in monthly installments as a convenience to the Client. [The] monthly payment for month one [was to] be 165.00 followed by 165.00 per month for a period of 12 remaining months.”
Twelve payments of $165 does not equal $1,982, but rather it equals $1,980.
Mr. Bryson is unsure how the non-refundable fee in the contract was actually calculated.
Per the terms of the contract, after the initial twelve payments, Mr. Bryson was to pay an account maintenance fee of $50.
The contract does not give an indication of what services are to be provided in return for the $50 monthly account maintenance
After returning the contract, the Defendants withdrew $165.00 per month.
The monthly fee is automatically deducted from Mr. Bryson’s checking account through an electronic funds transfer each month regardless if any services are performed by the Defendants for the consumer that month.
These monthly fees are collected by the Defendants before they have fully performed any alleged credit repair services.
The contract does not state a guarantee of performance, does not state an estimate by which the performance will be complete (only the amount of time for which he will pay), does not state an estimate of the length of time necessary to perform the service, does not state the credit repair organizations’ principal business address, and does not state the statutory language regarding the consumer’s right to cancel the contract.
The data that the Defendants asked for from Mr. Bryson and received does not even give the Defendants enough data to attempt to perform its duties and obligations under the terms of the contract.
When Mr. Bryson would email regarding his account, he would receive replies from Defendant Gregory Fishman.
Upon information and belief, Mr. Bryson believes that all of the defendants are working in concerted effort under the direction of Defendant Otto Berges and Defendant Gregory Fishman. – Source
It appears that the last suit for a very similar issue was settled by the Defendants. – Source
I’m not sure if two cases make a pattern or not but Berges might be the new best friend of these consumer attorneys pursuing these similar cases.
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