In 2013, the Consumer Financial Protection Bureau (CFPB) sued debt settlement company Morgan Drexen for collecting illegal “upfront fees” for debt settlement services and for running deceptive advertisements. Shortly before that, the company filed suit against the CFPB, challenging the agency’s investigative authority. The CFPB prevailed in its lawsuit: in April 2015, a federal court ruled against Morgan Drexen and found that the company misled the court and falsified evidence during the lawsuit.
Morgan Drexen went out of business in late June 2015 after filing for bankruptcy. On June 19, 2015, the company shut down its business after a federal court ordered the company to stop collecting money for debt settlement work. The CFPB is now notifying affected consumers about their rights and the actions they should now take. This information is located on the Morgan Drexen website.
Here is what the Bureau is telling consumers:
- Morgan Drexen filed for bankruptcy and went out of business after a court ruled that Morgan Drexen violated the law. Morgan Drexen is not doing any more debt settlement work. This means that you must take action and make choices about your debts. If you have one or more settled debts, Morgan Drexen will not send your payments to the creditor for you. You must begin to make your payments directly to your creditors for any debts that have been settled but not yet paid off. Please contact any creditors with whom you have settlements. Act quickly to avoid losing the reduced debt of your settlement.
- For debts that were not settled, you will need to consider other options. Morgan Drexen is not in business and cannot settle these debts. You can negotiate directly with creditors, begin making payments, or consider other options such as bankruptcy. This website’s Debt Resources page has free information from the federal government to help people with their debts.
- To see what debts are settled and what debts are not settled, log into your account. Find information about the due dates and payment amounts for your settlements. A checklist of next steps available can help you take action and protect your rights.
- A letter and email are being sent to you with information about your debts and what you need to do. The worksheet of next steps is included in the letter. Watch for the letter and email from Morgan Drexen. They tell you how to protect your rights.
- Your creditors are being told that Morgan Drexen has gone out of business. We are asking creditors to work with you on your debts. If you have any questions, please call our consumer helpline at (844) 358-6195.