The suit alleges that Morgan Drexan violated racketeering laws and the Credit Repair Organizations Act. Specifically, the suit claims that the company actively conspired to avoid laws that apply to debt settlement companies and has "engaged in the unauthorized practice of law.''
The Wards retained the services of Morgan Drexan in an effort to pay their credit card debt claim, paying the company $1,700 to negotiate their debt settlement, believing that the company had the capability to do that. Under the arrangement with Morgan Drexan the Wards had $174.47 direct debited from their bank account to the company, which was allegedly to be held in trust to pay the couple's creditors. However, it appears to have been used to pay Morgan Drexan fees instead.
Furthermore, the couple had their bank account garnished while under Morgan Drexen's representation, and were forced to pay post-judgment fees because the money they thought was being used to pay off their debts was being kept instead by Morgan Drexen, the complaint said.
The claim states that Morgan Drexen uses "a deceptive and predatory scheme to enrich themselves at the expense of financially vulnerable consumers by charging exorbitant rates to 'negotiate' unsecured debts, the consequence of which is that creditors don't get paid and defendants' 'clients' are left with destroyed credit.''
The lawsuit was filed on December 22, and alleges that thousands of people across the country have been defrauded or misled by Morgan Drexan, and so the suit is seeking class action status.