WASHINGTON Aug 20 The U.S. consumer watchdog
said it filed a lawsuit on Tuesday against a Nevada-based debt
settlement company that regulators said charged improper fees
and made misleading claims about its services.
The Consumer Financial Protection Bureau said Morgan Drexen
charged upfront fees for debt-relief services, even though firms
are not allowed to charge such fees until after they have helped
settle or reduce borrowers' debt.
The firm also incorrectly led consumers to believe they
would be debt-free after a few months of Morgan Drexen's
services, the bureau said.
The bureau's lawsuit, filed in the U.S. District Court for
the Central District of California, seeks penalties against the
company and its chief executive, Walter Ledda.
Morgan Drexen had previously filed its own lawsuit in
federal court arguing the consumer bureau overreached when it
asked the firm to hand over documents related to its customers.