Ohio AG Goes After California Debt Settlement Companies

Debt settlement is basically debt collection by another name. Out of one side of their mouths, debt settlement companies promise creditors they will help them get paid. Out of the other side of their mouths, debt settlement companies promise consumers great “deals” to resolve their debts. In order to appear more effective (or trustworthy, maybe), many debt settlement companies go to great lengths to appear to be law firms, while putting WE ARE NOT YOUR LAWYER disclaimers in the small print to attempt to avoid violating unauthorized practice of law regulations.

At best, consumers spend a lot of money to get settlements they could easily have gotten themselves with a few phone calls. At worst—and far too often—consumers spend a lot of money and get nothing.

That’s apparently what happened to consumers who hired Jackson Hunter Morris & Knight and Nelson Gamble (now dissolved), two California debt settlement companies apparently masquerading as law firms. (According to the Ohio attorney general’s blog post, Jerry Nelson, the man behind both firms, is not licensed to practice law in California.)

Citing three violations of Ohio law, Ohio Attorney General Mike DeWine Sued Nelson and his companies in Ohio state court last Thursday. Here is the complaint (PDF).

(photo: http://www.flickr.com/photos/punkassphotos/5430657634/)