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Debt Settlement Law Firm Accused Of Duping Clients

POSTED: Tuesday, August 19, 2008

Local 10's Julie Summers exposed a law firm that charges high fees for debt settlement but instead faces charges of leaving clients even deeper in debt.

When Summers went to the Coral Springs law firm of Hess Kennedy, she and a Local 10 photojournalist were met by an unidentified man who said, "I'm going to need to ask you to leave the property."

"Why is that?" Summers asked. "We're just here to ask about…"

"We have no comment," the man interrupted. "I need you to leave the property. I've already notified the Coral Springs Police Department. I need you to leave."

Summers didn't even get an opportunity to explain why she was there.

"Hess Kennedy itself really wasn't a debt settlement business model," Robby Birnbaum, a debt settlement attorney with Greenspoon Marder, P.A., told Summers. "What it was was essentially a law firm holding itself out to consumers as the end-all save-all for all their financial problems."

Lillian DiStefano concurs. She is a consumer who feels burned by Hess Kennedy. She hired the law firm to help with her financial problems and paid the company $688 a month for more than two years, believing that money was being used to settle her debts. But now she discovers those dollars never made it to her creditors.

"I want my money back," she said. "I want my $14,000 something -- whatever the total is -- back. It's not right."

According to the Florida attorney general, DiStefano is one of hundreds of people affected by what the attorney general's office refers to as Hess Kennedy's "deceptive trade practices."

The law firm's accused of collecting "exorbitant" fees up front from consumers and then funneling money to friends and relatives while doing nothing to help clients with their creditors.

All of which leaves DiStefano and other Hess Kennedy clients in a jam. They turned to the law firm for help but now find themselves even deeper in debt.

"I am at least $10,000 more in debt," DiStefano said. "At least. And I'm facing foreclosure."

Now the fight begins to try and get her money back from Hess Kennedy.

The attorney general's office has filed a court order to place the law firm in receivership to protect whatever assets remain, and the Florida Bar has filed a motion to suspend the law license of Hess Kennedy.

"We are investigating," said Cindy Guerra, the regional deputy in the attorney general's office. "We are trying to find legislative remedies and we are going to continue litigating against people who take advantage with unfair deceptive practices. This is something we are not going to stand for."

If you're thinking of hiring a debt settlement company, here are some tips:

Never pay the full amount of fees up front. They should be paid in increments.

Also, make sure your money does not go directly to the debt settlement company. Your monthly payments should go to a bank account in your name and the debt settlement company should get a copy of the statement.

It's also important to check the contract for a written notice of cancellation. A reputable debt settlement company will allow you to cancel at any time and receive up to 50 percent of your money back.

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