On February 24, the Consumer Financial Protection Bureau asked a federal district court in Florida to approve a $107 million settlement to resolve claims against Orion Processing LLC.  The Bureau alleged the bankrupt company engaged in a debt-relief scheme that cost consumers millions. 

The CFPB filed suit against Orion in August 2015, alleging that the company operated a debt relief business under the name World Law Processing that took “exorbitant, illegal upfront fees from vulnerable consumers suffering financial difficulties.”  According to the Bureau, the company specifically targeted consumers with large debts and promised them that attorneys from World Law would negotiate affordable repayment plans on their behalf, but only if the consumers stopped paying their creditors and instead paid World Law.  Most consumers paid a $199 initial fee, a monthly attorney service fee of $85, and additional “bundled legal service fees” that ranged from ten to fifteen percent of each consumer’s outstanding debt.  However, instead of providing consumers with legal representation, the Bureau contended, World Law provided only “boilerplate pleadings” that were not customized to each consumer’s particular case.  The CFPB alleged in the Complaint that more than 21,000 consumers enrolled in World Law’s program since October 2010. 

The proposed settlement, agreed to by the Bureau and Orion, would result in judgment in the Bureau’s favor in the amount of $106,813,049, a sum the Bureau intends to use to compensate affected consumers.  Orion must also pay a $20 million civil penalty.  In addition to monetary relief, the proposed settlement would permanently enjoin Orion from conducting business, prohibit the company from using any customer’s information, and bar it from attempting to collect payment from any consumer who transacted with it or its related entities.  However, the monetary settlement and fine represent general unsecured claims, as Orion and its related companies all filed for bankruptcy in Texas in 2015.  

The case is Consumer Financial Protection Bureau v. Orion Processing LLC, et al., Case No. 1:15-cv-23070.