“I’m only 21 . . . I was facing bankruptcy,” says Ashley Miller. “They promised me I’d be completely debt free within two or three years. They promised me there was an attorney fighting my case. They assured me they do this for thousands and thousands of people each year. I’m in a horrible situation, and this sounds like too good to be true. It seemed like this was the way out.”
That was then. And now, several months later, things aren’t much different for the Philpot, Kentucky, resident except that as a college student with $15,000 in medical bills she can’t pay, she says she’s now leaning more toward bankruptcy.
What happened in the brief interim between then and now to bring her to this point? Miller believed Morgan Drexen’s promises and signed a contract so they could put those promises to work. She also gave them her bank account number to begin monthly debits of $167. “I assumed all money went to Morgan Drexen and they would pay the individuals I owed money to,” she says. “I was never told any of this was going to the attorney.”
Morgan Drexen also told her not to have any contact with her debt collectors other than to tell them that Morgan Drexen would be handling the matter.
She learned, eventually, when she talked to some creditors, that they’d never heard or received anything from Morgan Drexen. She’s never spoken to the attorney who was supposed to be helping her.
Tired of unanswered questions, being shifted from one person to another, and unreturned calls, and fearful because she’d since learned that the company had an “F” rating with Business Consumer Alliance and a number of negative reviews, she decided to cancel her contract.
The company resisted. Again she was sent from one person to another just to cancel. Morgan Drexen said there was no need to cancel; they’d get things figured out.
Nevertheless, after she finally did cancel, she found that nothing at all had been paid toward her debt. And her creditor wants full payment, now!
Larry Howard, of Palmersville, Tennessee, relates a similar experience. Disabled after 25 years with General Motors, the 64-year-old Howard incurred his indebtedness when his wife suffered a heart attack and stroke. When he saw Morgan Drexen’s TV commercial and called, they promised to set up a plan whereby he could pay $190 each month and they’d pay his bills. He, too, signed Morgan Drexen’s contract. And after four months, he, too, wanted to cancel.
Why? Though $900 had been paid on his behalf, he says he’d paid Morgan Drexen $3,200.
Again, Morgan Drexen refused to cancel. “The manager got on the line”, says Howard, “and said ‘I’m not canceling you; we’re going to keep you open.’” They did cancel, but not until four months had passed. And in the meantime, in addition to the by then unauthorized debits, Howard incurred overdraft charges. He and his wife have been sued, now, because of unpaid credit card debt, and he says he could have paid off one of their cars that was repossessed with the money he’s lost to Morgan Drexen.
Morgan Drexen, F-rated, with 229 complaints, answers most, if not all, complaints by pointing out that they have no contractual relationship with the complainant; the complainant’s contract is with the attorney. They provide back-office support to law firms. They respond just the same, “as a token of good faith.”
Typically, they claim that the attorney commenced performance in accordance with the agreement, and they allege monies are due for work such as setting up a file and trust account for the customer, reviewing and analyzing relevant documents, and setting up a projected financial plan. Thus they conclude that both Miller and Howard, in fact, owe them money. They agree to waive the fees due, but refuse to refund the $1,002 Miller paid or any part of the $3,200 Howard paid. (Many clients, including Miller, who signed her contract online, had no idea their contract was with the attorney, not Morgan Drexen, or that part of their payment was to go to the attorney for fees.)
A Florida man who cancelled within an hour of the time he signed up with Morgan Drexen also complains of promises to cancel that weren’t kept, calls not returned, and runaround transfers from one person to another. Ten calls later, with an hour’s wait on one, he was told he’d receive his $100 refund with 31 days. Instead, they debited his bank account another $67. Though they responded to his complaint by saying they’d sent the customer the refund, receipt of the refund has not been confirmed to us by the customer.
A Louisiana woman adds that Morgan Drexen requires your social security number and banking information just to tell you about their program.
In 2004, The Federal Trade Commission filed a complaint against, among others, Walter Ledda, who had fronted the purported nonprofit debt counseling organization, “National Consumer Council,” which, the FTC alleged, falsely claimed that its debt negotiation program could stop creditors’ collection efforts and eliminate debts.
More recently, in February 2010, the Minnesota Attorney General filed a complaint against Morgan Drexen, which company had been founded by Ledda. The complaint alleged offering of services without being registered and bonded, as is required by Minnesota law, failing to provide debtors the required financial analysis, failing to provide required disclosures and notices, and more.
Business Consumer Alliance reviewed Ledda’s TV advertising, questioned its claims, and asked for substantiation. Ledda did not respond.
Morgan Drexen has responded to all complaints presented to it by Business Consumer Alliance. In almost all cases, though, the consumer has not confirmed that the complaint was satisfactorily concluded. Undoubtedly, most are still trying to recover from the Morgan Drexen debt cure.