The Mossler Law Firm of Carmel, Indiana has been slapped by the Vermont Attorney General for multiple infractions. While they claim to settle their clients debt, they found they needed to settle their own civil violations with the state of Vermont.
Mossler Law Firm had a very aggressive fee structure. It charged between 8-10% of the debt balance, monthly maintenance fees of $30-100 a month and an additional fee of 33% of the “savings.” On a $20,000 plan, a debtor would pay Mossler at least $5,980 and up to $10,100 in fees to settle the debt for $10,000. This calculation does not include additional interest charges that would continue to accrue at the rate of 12% (state maximum in Vermont for collection agencies prior to judgment), nor does it include the additional income tax liability that clients likely would have to pay on forgiven debt.
Mossler Engaged in Unfair and Deceptive Trade Practices
Mossler Law Firm was found to have violated the Vermont Consumer Fraud Act. Their business practices were deemed to be unfair and deceptive. Mossler did not include a disclosure in its contract giving the right to cancel the agreement. They failed to make payments to creditors once every 30 days as required by state law. Additionally, their fees for service grossly exceeded the $50 initial setup fee cap and 10% of creditor payments.
Based on the violations cited by the Attorney General, it appears that any debt settlement plan may be in violation of state law. The law noted in the release by the state of Vermont is 8 V.S.A. § 4870a. According to Vermont statutes, “Licensees shall make payments to creditors in a timely manner at least once every 30 days in accordance with the contract between the licensee and the debtor.” Since debt settlement plans normally hold funds well beyond 30 days, they would also likely be in violation of state law.
If you live in Vermont and are considering doing business with a debt settlement company, you should first contact the office of the Attorney General to inquire whether the firm is licensed by the state. Of course, you should also note their Better Business Bureau rating which can provide information regarding their reliability.
Vermont clients will receive a letter indicating that Mossler Law Firm will pay an additional $2,000 over and above all reimbursements if they were sued by creditors while enrolled in the plan. For more information on the Mossler settlement with the state of Vermont, see the Assurance of Discontinuance that completed the settlement.
Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.
Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.
In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.
Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!
Favorite quote:
"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
Thomas Jefferson
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